Erie County is in northeast Ohio where a large portion of Ohio’s bioscience activity takes place. In 2008, the region was home to 34.1% of bioscience employment, 32.8% of payroll, and 39.5% of the number of total establishments.

The northeast region includes 21 counties in the Greater Cleveland area: Ashland, Ashtabula, Carroll, Columbiana, Crawford, Cuyahoga, Erie, Geauga, Holmes, Huron, Lake, Lorain, Mahoning, Medina, Portage, Richland, Stark, Summit, Trumbull, Tuscarawas and Wayne. It includes six metropolitan areas: Cleveland-Elyria-Mentor MSA, Akron MSA, Youngstown-Warren-Boardman MSA (Ohio counties only), Canton-Massillon MSA, Mansfield MSA, and Sandusky MSA.

From 2000 to 2008, the northeast region has had the highest bioscience employment of all the regions in Ohio, with 18,933 people in 2008. This region also has had the largest number of locations (643 in 2008) and the highest payroll ($1.28 billion in 2008). The average wage for an employee in the bioscience industry in the northeast region was $67,435 in 2008, lower than the southwest and central regions as well as the state average. The $1.28 billion payroll in 2008 was 3.8% lower from the previous year. Payroll peaked at $1.33 billion in 2007.

The northeast region had the second-lowest growth rate of all the regions in terms of employment between 2000 and 2004. From 2004 to 2008 the region saw a decrease in employment. For the entire period, the region’s employment increased 0.9%. Moderate growth occurred in payroll and average wages for the northeast when it is compared to the other regions in Ohio. In addition, the region experienced the third-highest growth in the number of bioscience locations between 2000 and 2008.

Bioscience by Subsector

Medical Device & Equipment Manufacturers was northeast Ohio’s largest subsector in 2008 in terms of employment (8,458) and payroll ($487.8 million), followed by Agricultural Biotechnology (3,779 employees and a payroll of $404.2 million). Agricultural Biotechnology had the highest average number of employees per location (86). It also had the highest average wage in 2008 of over $100,000, which was almost $30,000 higher than Research & Development, the next highest subsector. Medical Laboratories & Diagnostic Imaging Centers had the most locations in 2008 (204), followed by Medical Device & Equipment Manufacturers (163).

The Pharmaceuticals & Therapeutics subsector grew at the fastest rate from 2000 to 2008. It experienced 70% growth in employment and 72.4% growth in payroll. The number of locations increased by 33.3% and was the third-highest growing subsector in the northeast region in terms of locations. Medical Laboratories & Diagnostic Imaging Centers saw the highest growth in the number of locations with a 106.1% increase between 2000 and 2008. However, this sector has the lowest average wage ($42,507).

Three subsectors lost employment over the study period: Agricultural Biotechnology (-12.1%), Medical Device & Equipment Manufacturers (-10.1%) and Research & Development (-2.6%). Employment in both the Agricultural Biotechnology and Medical Device & Equipment Manufacturers subsectors saw the peak of their employment in 2001, while employment in R&D peaked in 2002.
The only subsector to lose payroll was Medical Device & Equipment Manufacturers. Agricultural Biotechnology gained some payroll, although it lost jobs. The Testing Laboratories subsector added jobs and payroll, but lost locations.

Economic Impact of Bioscience in Northeast Ohio

In northeast Ohio, there were 56,965 total bioscience jobs, $17.8 billion of goods and services produced, $5.4 billion of value-added production, and $3.3 billion of labor income due to the bioscience sector. Of the employment impact, 31% was attributed to direct impact, 41% to indirect impact, and 27% to induced impact. Of the labor income impact of bioscience in northeast Ohio, 46% was attributable to direct impact, 38% to the indirect impact, and 16% to the induced impact. Tax revenues amounted to $1.2 billion, of which 60% went to the federal government and 40%, or $485 million, went to Ohio and local governments in the region.

The bioscience subsector with the highest impact in northeast Ohio is Agricultural Biotechnology. Its impact is significantly larger than the second most important subsector, Medical Device & Equipment Manufacturers. This subsector accounts for 33% of the bioscience employment impact, 24% of output impact, 29% of value added, 32% of labor income, and 27% of tax revenues.
Pharmaceuticals & Therapeutics, the subsector with the third-largest impact has considerably less impact than the first two subsectors. It accounts for about 10% of the impact of bioscience in northeast Ohio according to all measures of economic impact. The other three subsectors combined account for 13% of employment impact, 5% of output impact, 9% of value-added impact, 12% of labor income impact, and 8% of tax impact.

Ohio Business

With its numerous and relatively high-density cities, Ohio is the 7th largest state in the nation and home to 11.5 million people. Just under half of all Ohioans live in the three largest metro areas: Columbus, Cleveland, and Cincinnati.

Ohio’s Gross Domestic Product (GDP) grew at a rate of 1.95% in 2008. Over $472 billion in goods and services were produced in Ohio in 2008. If Ohio were a country, its GDP would rank it as the 23rd largest in the world, just ahead of Saudi Arabia.

More than 1,000 foreign owned facilities, from 28 countries, are operating in Ohio. Ohio is within one-day drive of 62% of U.S. and Canadian manufacturing facilities and has 10 designated foreign trade zones strategically located around the state.

Bioscience in Ohio

In the past ten years, bioscience in Ohio has evolved from a promising opportunity into a vital component of the state’s business, health care, and academic landscape, and truly a global player.
Total employment in Ohio’s bioscience sector in 2008 was 55,465. Since the year 2000, the bioscience sector in Ohio has added over 8,400 jobs. During a time of declining employment nationwide, more than 1,500 of those bioscience jobs—from blue to white collar—were added between 2007 and 2008.

From 2004 to 2008, 355 new bioscience companies began operation in Ohio—an average of 71 each year. In 2008, 81 bioscience-related organizations either launched or established their first facility in the state. Back in 2000, the number of new arrivals totaled 12. More than 1,250 bioscience firms start work every day, at 1,628 facilities in Ohio, proving that a buckeye leaf never falls far from a bioscience company’s front door.

Through the steadfast efforts of Ohio’s regional affiliates in Cleveland (BioEnterprise), Columbus (TechColumbus), Cincinnati (BioStart), and Athens (EBI), other strong incubator partners like the Akron Global Business Accelerator, Toledo’s Rocket Ventures, Braintree Business Development Center, and six Third Frontier Entrepreneur Signature Programs around the state, bioscience entrepreneurs will benefit from sage advice and funding options unavailable in many parts of the country.

During the last 3 years, 45 new bio companies have come to Ohio from around the world and at least 116 existing bio companies have expanded their operations.
In 2008, bioscience, medical technology, and research organizations continued to expand in Ohio. Despite a tumultuous global economy, Ohio’s bioscience industry is displaying sustained growth fueled by strategic state investment, favorable industry trends, and a qualified and plentiful workforce.

The biosciences are a diverse and often converging group of industries and activities with a common link—they apply knowledge to develop solutions that sustain, restore and improve the quality with which humans, plants, and animals function and utilize biological products to address unmet needs in our world.

Bioscience companies are involved in production, research, development, consulting and testing. The industry extends across different markets and includes manufacturing, services, research, and health care-related activities.

This section focuses on bioscience business and research occurring in Ohio, including, but not limited to, pharmaceuticals and therapeutics, medical device and equipment manufacturers, R&D facilities, medical laboratories, diagnostic imaging centers, agricultural feedstock and chemicals (agbio), and their respective infrastructures.

Bioscience is part of a bigger picture, that of Ohio’s overall health care economy and ecosystem. Ohio bioscience organizations contribute daily to technological advances benefitting the health and well-being of Ohioans, Americans, and citizens of the world.

New drugs and devices developed in Ohio are delivered in hospitals, clinics, and physician offices around the globe. Likewise, ideas that originate among doctors, nurses, and other caregivers are increasingly accessing resources that can translate them into real products.

For economic impact reports related to health care delivery, the Ohio Hospital Association’s economic impact report can be found at www.ohanet.org while The Ohio Council of Medical Deans’ economic impact report is available at www.medicinemeansbusiness.com.

Number of Bioscience Organizations
Research conducted by BioOhio and Cleveland State University through February 2010 indicates at least 1,253 bioscience-related firms, with a combined 1,628 locations, were operating in Ohio. These organizations range from global brands to newly hatched start-ups. Retrospective analysis revealed that 1,057 bioscience firms existed in 2000.

Ohio’s pillar bioscience companies include Battelle, Abbott Nutrition, Cardinal Health (the state’s largest corporation), Procter & Gamble Health Care, Meridian Bioscience, Ethicon Endo-Surgery, STERIS, Boehringer Ingelheim’s Ben Venue Laboratories, Roxane Laboratories, and Philips Medical, among many others. Several of these businesses have expanded their Ohio footprints significantly in the past two years.
Emergent bioscience organizations in Ohio continue to attract market and investor attention, such as Minimally Invasive Devices, Neuros Medical, Checkpoint Surgical, Akebia Therapeutics, Franklin & Seidelman, CardioX, OrthoHelix Surgical Designs and many more. The early stage technology and promising innovation demonstrated by companies like these provide the seeds for Ohio’s commercial and clinical bioscience products of the future.

New Bioscience Organizations
In 2008, 81 bioscience-related firms either launched or established their first facility in the state. Several of the newcomers arrived from other states or countries including California, China, Florida, Israel, New Jersey, New York and Oregon.

Nearly 50% of 2008’s new bioscience organizations appeared in northeast Ohio, including Cervilenz, ChanRx, and ViewRay. The Cervilenz measurement device helps clinicians in preterm labor triage decide quickly who should be released, observed, or admitted. ChanRx, a spin out of ChanTest, is developing small molecule drug candidates directed at ion channel targets. M2M Imaging, ViewRay and Cleveland Heart were drawn to the northeast region’s strong imaging and cardiovascular clusters.

With 25 new organizations in 2008, the Columbus area had its best year since BioOhio began tracking this indicator. CardioX and EXCMR added to Ohio’s cardiovascular and imaging strength, and health care IT companies UpDox, Rubicon Labs and Health Care DataWorks augment another thriving niche in central Ohio.

Southwest Ohio enjoyed two new additions to their strong pharma, Blue Ash Therapeutics and Airway Therapeutics. And northwest Ohio is on the rise with the likes of ADS Biotechnology, which is developing a solution to capillary leak syndrome.

Research Indicators
Ohio’s higher education depth and breadth is at the core of its bioscience strength. The effective blending of 213 post-secondary institutions, offering skills training and two-year, four-year, graduate and advanced degree programs, provides the education and workforce resources necessary to build and grow a bioscience organization.

The Ohio State University, Case Western Reserve University, Ohio University, University of Cincinnati, University of Toledo, and Wright State University are among the most prominent research facilities in the nation. Impressive funding levels and the attraction of eminent researchers, intellectual property, and the robust complementary clinical network all point to a healthy research environment in Ohio.
Research excellence in Ohio is also driven by world-class medical centers such as the Cleveland Clinic, Cincinnati Children’s Hospital Medical Center, OhioHealth, and Nationwide Children’s Hospital.

NIH Funding
Based on the most recent published data (2008), Ohio-based institutions and companies received $637 million in NIH funding. Outpacing the U.S. average of $403 million, Ohio’s 2008 NIH awards ranked 10th in the nation. Five institutions—Case Western Reserve University, Ohio State University, University of Cincinnati, Cincinnati Children’s Hospital Medical Center, and The Cleveland Clinic—were once again among the nation’s top 100 NIH funding recipients.

Among nearby states, Ohio’s NIH funding surpassed Michigan ($577 million) and Indiana ($202 million), but still lags Illinois ($719 million).

Intellectual Property

In 2008 Ohioans received 2,227 total issued patents, 330 of which were bioscience-related. From 2004-2008, 1,978 bioscience-related patents were issued in Ohio, well above the national average (1,107).

Clinical Network

The importance of translational medicine—accelerating basic research discoveries to clinical practice—makes national health care rankings a key component of a state’s bioscience infrastructure.
From a total of nearly 5,000 medical centers in the nation examined by the U.S. News & World Report in 2009, 16 Ohio hospitals and medical centers were ranked among the top 230 hospitals in a variety of specialties, ranking Ohio tied for third among all states.
Ohio’s national reputation for medical excellence also is supported by unrivaled performance in Thomson Reuters’ 100 Top Hospitals rankings, which include more Ohio listings (62) between 2004-2008 than any other state.

Of the 16 Ohio hospitals included in the 2009 U.S. News & World Report rankings, the Cleveland Clinic maintained the highest ranking as fourth overall in the nation. In addition, Cleveland Clinic’s Heart Center again was named the nation’s best for cardiac care—a distinction it has earned for 15 consecutive years. The magazine’s survey also ranked 15 Cleveland Clinic specialty care areas among the nation’s best.
Other Ohio hospitals earning recognition in several disciplines included The Ohio State University Medical Center, with 10 top 50 specialty areas, and University Hospitals of Cleveland, with 6 adult specialty care areas ranked in the top 50.

The 2009 U.S. News & World Report “America’s Best Children’s Hospitals” report showed that 4 of the top 20 pediatric hospitals are in Ohio—Cincinnati Children’s Hospital Medical Center, University Hospital’s Rainbow Babies & Children’s Hospital in Cleveland, Children’s Hospital Cleveland Clinic, and Nationwide Children’s in Columbus.

This robust clinical network and prominent medical reputation make Ohio an ideal proving ground for biomedical innovations. Ohio hosts nearly 17% of all clinical trials conducted in the U.S. As of February 2010, a total of 3,740 clinical trials were in progress or actively recruiting patients in Ohio. Ohio ranks seventh among all states and first in the Midwest in this important indicator.

A majority of these trials are in either phase II (37.5%) or phase III (39%), indicating that Ohio is a prime location for validating bioscience research as it approaches commercialization. Of the phase I-IV studies conducted in Ohio, 45.6% have been funded in whole or in part by the NIH.

Total Bioscience Funding

There are now 86 sources of capital in Ohio for bioscience commercialization and company expansion, ranging from angel funds and venture capital to leveraged buyout firms. There were only 12 in 2001. Other common sources of funding for Ohio companies include IPOs, SBIR/STTR, state biomedical grants (Ohio Third Frontier), acquisitions, and NSF and NIH grants. Overall, more than $1.5 billion were invested across Ohio to accelerate bioscience growth in 2008, down from a record total in 2007 ($2.5 billion), but a slight increase from 2006 figures.

Consistent with broad national trends, venture investing and acquisitions in Ohio were down in 2008, and this trend continued regionally and nationally through 2009. Despite the downturn, more than $189 million in bioscience or health care venture capital investment flowed into the state during 2008 and another $96 million during 2009, placing Ohio second in the Midwest to Minnesota, according to the BioEnterprise Midwest Health Care Venture Investment Report. Forty-three companies received equity capital in 2008 and another 40 in 2009, though the average investment was down in 2009. Northeast Ohio, led by Cleveland, is the second most active Midwest location after Minneapolis.

One consistent bright spot for investment options in Ohio is angel funding—organized groups of high net-worth individuals and funds. Deal flow is solid and angel investing has remained very strong, led by the 282-member, Columbus-based Ohio Tech Angels, now the second largest angel group in the U.S., as well as North Coast Angel Fund in Cleveland and Queen City Angels in Cincinnati.

Notable 2009 financings included Battelle Ventures leading a $5 million round for an aerosol-based drug delivery system being commercialized by Optivair. Akebia Therapeutics, developer of small-molecule drugs for anemia and vascular disorders, raised $16 million, led by Novartis Bioventures and Triathlon Medical Ventures. Axiomed Spine, developer of a total disc replacement, raised a $6.5 million C round from a syndicate of Ohio and non-Ohio venture firms. Neuros Medical raised $1.8 million in two separate rounds during 2009 from angel investors. Orthohelix Surgical Design, developing and manufacturing implants and surgical instruments, raised a $2 million C round from River Cities and Mutual Capital Partners.

In pure venture capital terms, since 2004 over 150 investment groups have invested more than $1.1 billion into 128 Ohio bioscience and health care-related companies. The global IPO climate also has cooled since 2007, although strategic acquisitions have made exits a reality for a number of Ohio companies that have been growing profitably over the years. Eight exits occurred between 2008 and 2009, totaling approximately $500 million. All of the acquired companies have remained in Ohio with accelerated investment and expansion plans.

In 2008 Bargmann Management was purchased by Invacare and Healthcare Transaction Processors was acquired by McKesson’s Relay Health. Medtronic purchased an NDI Medical product line, USB/Anatrace merged into Affymetrix, Whole Health Management was purchased by Walgreens, and the largest deal of 2008 was Integra Life Sciences’ $200 million acquisition of the Akron-based Theken Spine family of companies. In 2009 Noteworthy Medical Systems was acquired by Germany’s CompuGroup Holdings AG, and Artromick Mobile Solutions Group was bought by Capsa Solutions.

Third Frontier Project

Ohio’s 10-year, $1.6 billion Third Frontier Project launched in February 2002. This project is the state’s largest ever commitment to expanding high-tech research capabilities and promoting innovation and company formation to create high-paying jobs for generations to come.

SRI International, in partnership with the Georgia Tech Enterprise Innovation Institute, completed an independent study of Ohio Third Frontier and related Ohio technology-based economic development programs in September 2009. Results from the study and additional project statistics from the Ohio Business Roundtable include:

• Based on the State’s expenditures totaling $681 million, the Third Frontier Project generated a total economic impact of $6.6 billion and $2.4 billion in wages and benefits through December 2008.
• Third Frontier has created 48,000 jobs, and $3.2 billion in follow-on dollars (federal, state, local, private foundation funds) through June 2009.
• Project investments assisted in the formation, attraction, or initial capitalization of more than 571 companies through June 2009.
• The project has leveraged a $10 return for $1 invested during 2003-2008, with the expectation of increased impacts in the years to come.
• Ohio Third Frontier’s total return on investment has averaged 22% per year over the life of the initiative.

During 2008-2009, 27 new bioscience projects were funded by the Third Frontier, totaling $138 million in state funds, matched by more than $153 million in corporate funding.