HI. TECH
Vision of a biotechnology industry much dreamier than its bare-bones reality

By John Duchemin
Advertiser Staff Writer

This is the first in a series of columns examining the main elements of the nebulous Hawai'i "technology industry" in a critical light. Are these elements based on fact or fancy? Can a viable economic sector grow from sub-sectors that business leaders deem most important?

Biotechnology, Hawai'i's dream industry, is still just a dream.

Biotech has long been considered one of the most promising areas for business development in Hawai'i. Proponents sell the idea of a research-based industry that farms the state's diverse ecosystem for unique and useful natural compounds; that attracts major investments from the world's largest pharmaceutical, life science and other interested companies; and that pumps millions of dollars into hospitals, the University of Hawai'i medical school, and the venture capital community.

It's an intoxicating idea and one that could eventually make sense. Hawai'i is the only place in America where a major research university is a stone's throw from rain forests, coral reefs, volcanoes and deep-ocean water; its incredible environmental mix, and rich pool of life forms found nowhere else, are potential magnets for botanists, ocean scientists, biochemists, genetic researchers and vaccine makers.

So that's the vision. The reality still falls well short.

Never mind that a 1999 report by former Gov. Ben Cayetano's administration said Hawai'i has about 45 biotech employers with 1,700 employees. That number was padded from the inclusion of employers that are using existing biotechnology — such as farms engaged in diversified agriculture, and "aquaculture" companies breeding shrimp and algae — as opposed to researching new advances.

Without the statistical padding, Hawai'i's biotechnology industry is revealed as minuscule. Research firms are brand-new or tiny — usually both. The largest and oldest is veteran research group Hawai'i Biotech, an 'Aiea firm with about 30 employees that for years has plugged away at vaccines for dengue fever and other diseases.

Capital is also scarce, with only Hawai'i Biotech consistently garnering multimillion-dollar private venture investments or government grants for biotech research. Most of the recent venture invest- ments in Hawai'i have been not in biotech, but in telecommunications or software development, areas more akin to the expertise of the state's active venture firms.

The University of Hawai'i system does support some advanced biotech-related research, most notably the federally financed Cancer Research Center; the cloning work done by Dr. Ryuzo Yanagimachi, of worldwide fame for cloning mice, and his fellow researchers at the UH Institute for Biogenesis; and the maintenance of several natural compound collections of professors. Money invested in these projects, however, is tiny compared with the amount invested in major Mainland research institutes, or even compared to the R&D budget of some large biotech corporations.

Add Hawai'i's biotechnology assets together and you have the bare ingredients of an industry, rather than a finished product.

Hawai'i leaders point, over and over, to the future "new" medical school in Kaka'ako as critical for the industry's further growth. The spin is that the $150 million facility, when it's completed in a few years, won't just be the John A. Burns School of Medicine in a new skin — instead it will become a world-class biotechnology research hub, drawing top-drawer medical scientists and blue-chip companies to Honolulu.

That theme has become a holy litany for the university and the government, particularly since pressure was ratcheted up by the late 2001 approval of state bond financing for the project. But it's far too early to tell whether the Kaka'ako project will live up to its founders' dreams, or whether taxpayers will have financed an expensive cosmetic overhaul.

In the meantime, the Hawai'i biotechnology industry labors in the "neat idea" category — too cool to ignore, but too small to be considered a major player.

Reach John Duchemin at jduchemin@honoluluadvertiser.com or 525-8062.