RALEIGH – Every year it is a challenge to do something better at the CED Life Science conference, said Sam Taylor, president of NCBIO, the trade association for North Carolina’s life science industry and a co-host of the event, which opened Tuesday. “We try to identify issues, speakers and business opportunities that make the conference as compelling as possible.”

But one issue always highlights the agenda of the event, now in its 27th year: Access to capital

Evaluating the state of biotechnology in the state of North Carolina, Taylor noted: “We continue to have real concern about access to capital. We have made some progress through the Biotech Center, which is now making grants to inventors still in the universities to help bring their technologies closer to being venture ready.”

But, he added, “That’s just a drop in the bucket compared to the need we have.” North Carolina’s life science industry ranks annually as one of the largest in the country. According to the NC Biotechnology Center, North Carolina’s life science sector employs 63,000 people across more than 700 bioscience companies and another 2,200 service providers. But Taylor believes it could grow even larger at a faster rate – with the right kinds of help.

As the primary lobbying arm for the industry in NC, Taylor said, “We would like to encourage the state treasurer to continue and maybe expand his alternative investment portfolio.” That allows the state to invest in funds that in turn invest in NC startups.

He said the state could also help “lengthen the runway” for biotech startups by providing tax incentives, many of which the legislature repealed to support lowering the corporate tax rate generally.

Tax relief welcome

“We believe investment-based companies contribute disproportionately to economic growth and therefore merit economice support from the state,” he explained. “The best way they can do that is to relieve some of the tax burdens pulling money out of these companies they could otherwise use to advance their product.”

Last year NCBIO attempted to get the legislature to reduce the sales tax on research and development supplies. While it was in the House budget, it did not make it to the Conference Report.

“This year we’re trying a different tact by proposing franchise tax relief.” The franchise tax is paid on a company’s net worth. “It’s a tax on capital,” Taylor said, “the most precious asset these small companies have next to their intellectual property.”

Reducing the franchise tax rate, providing some exemptions and refunds would “be almost as good as getting the same amount of venture capital.”

While the tax of cents on the dollar is not large, for companies in B rounds or later, it usually adds up to a liability in “the low hundreds of thousands,” he said.

Growth challenges

Many of the state’s larger biotech and pharmaceutical companies are growing rapidly, he notes, but “The labor force and waste water treatment capacity are potential limits on growth. We haven’t hit the limits yet, but we’re trying to find regional waste water solutions that can be supported by local governments and the legislature.”

Regarding the labor force, Taylor said, “We’re grateful for continuing support for the customized training programs at community colleges. But we also have a substantial demand for graduate and post-graduates in engineering fields, particularly chemical engineering.”

NCBIO is also considering asking the legislature to put some supplemental funding into the Biotechnology Manufacturing Training Center at North Carolina State University. “The facility is more than ten years old now. It is at capacity and the equipment is a useful training platform, but it’s not current and becoming increasingly outdated.”

Taylor added that training more workers remains a big challenge. “Helping the universities meet the growing demand for engineers is a top opportunity to improve the lot of our growing companies.”