Dr. Judith Gwathmey, chief executive and scientific officer of Gwathmey Inc., is excited about the growing business opportunities in the burgeoning biotechnology industry. Gwathmey says her firm, which tests drugs to identify safety and toxicity before they are submitted to the Federal Drug Administration for approval, is a success story that illustrates the lucrative prospects in biotechnology for black-owned businesses.
Testing new drugs in the areas of infectious disease, arthritis, cancer, diabetes and cardiovascular disease on behalf of biotech companies is work that Gwathmey says is relevant and satisfying. “I think African Americans should become more involved in drug discovery, research, and development because the potential for companies like mine in terms of [annual] revenues is about $20 million, and the opportunities are endless,” she says.
Her 10-year-old, Cambridge, Massachusetts-based company has secured contracts ranging from $2,000 to $2 million by conducting biotech research for small or young companies and large firms such as GlaxoSmithKline and Johnson & Johnson.
The U.S. Census Bureau estimates that 843 black-owned firms generated $150 million in sales in 2002 by providing scientific research and development services. In addition, the Biotechnology Industry Organization (BIO) notes that U.S. healthcare biotechnology revenues increased from $11 billion in 1994 to $39 billion in 2003. The U.S. biotechnology industry spent $18 billion on research and development in 2003, according to the organization.
Dr. Irving W. McConnell, president of The McConnell Group in Dublin, Pennsylvania, is also tapping into the expanding industry. His company, which provides the necessary staff to conduct pre-clinical research, as well as supplies — such as syringes, needles, centrifuges, and chemicals — posted revenues of $5 million last year, half of which was generated from business with biotech companies.
Still, biotechnology, defined as the application of scientific and engineering principles to manipulate life forms to provide desirable products for human use, can be a difficult business for many startup firms strictly conducting clinical research.
Many young companies are hedging their bets that successful clinical trials to develop vaccines will turn a profit for them. One such company is Nora L.L.C., a biotech firm in Baltimore that is developing new immunology therapeutics, in particular, a treatment for recurrent miscarriages and in vitro fertilization failure caused by maternal rejection of the fetus.
Nora President Darryl Carter says patience is required for startup research firms because they must survive for several years on grants and venture capital investments before earning profits from their FDA-approved drugs. “So far we’ve received a grant of $75,000 from the state of Maryland and another $100,000 from the National Institutes of Health. We know it will take a few more years and several million dollars to get FDA approval, but the market is worth $800 million annually, so we are prepared to take the risk,” Carter says.
BIO, with a sponsorship from research firm Genentech Inc., has launched a minority outreach initiative at its annual convention. BIO hired the Osiris Group Inc., a Philadelphia-based marketing firm, to help execute and promote its outreach program. Osiris President Jeremiah J. White Jr. says black biotechnology firms need to contact venture capitalists, professional organizations, and individuals in the scientific community who can help them locate financial assistance and support services. White says, “We need to be prepared to build companies and create scientists and entrepreneurs that can capture these opportunities.”