The slow growth of a state biotech sector and the rise of a Destination Medical Center

A biotech graduate student whose résumé includes internships at Cargill and German chemical giant BASF, James Christenson hopes to graduate from the University of Minnesota in about a year.

If he's like most of his classmates, Christenson will find more and better job openings in biotech centers far from home.

Despite its prominence in the medical devices world, Minnesota doesn't stand as tall in the emerging field of biotech, where discoveries in green energy, stem cells, cloning and agriculture are creating new industries.

Overshadowed by dynamic hubs elsewhere — Boston and San Francisco loom large — Minnesota sends some of its brightest biotech talent away.

"For me, this is home," said Christenson. "I really would like to stay here."

In Rochester, city officials and others are hoping to turn that exodus into an influx of promising biotech researchers and companies. Central to that effort is Destination Medical Center, the ambitious, 20-year, multibillion-dollar plan to remake the Mayo Clinic and the city itself into a global hub for health care and medical research.

At the project's core is a pledge to grow new businesses and create tens of thousands of new jobs. There have been early successes, and Mayo officials say more projects, not all biotech, are in the pipeline.

"This stuff doesn't happen as fast as anybody would like to see," said Gary Smith, president of Rochester Area Economic Development Inc.

The pharma and biotech sectors in Minnesota employ about 2,168 people at 192 companies and generate an annual economic impact of about $194 million, according to research by the trade group LifeScience Alley. That's a fraction of the state's med-tech sector, which employs 17 times as many people with a $3.8 billion impact.

Other efforts to jump start Minnesota's biotech scene pale next to what's planned in Rochester, where a massive project to remake the Mayo Clinic and the city is two years into a 20-year timeline. The Destination Medical Center project blends private investment with public tax dollars to fuel rapid growth. Mayo plans to invest $3.5 billion, and predicts another $2.1 billion in private investment. Some $585 million in tax money, meanwhile, will build out the city's infrastructure.

The plan calls for adding up to 45,000 jobs to Rochester, nearly doubling its population and adding billions in state tax revenue.

Some of the earliest success has been with the development of the Mayo Clinic's Business Accelerator, a 2,500-square-foot office space in the city-owned Minnesota BioBusiness Center. It opened in 2013 with six tenants. Today it has 25. Three companies — Brandix i3, Imanis and Go Rout — have left the accelerator to open their own offices.

The accelerator intentionally puts people close together in small offices to encourage collaboration, said Jamie Sundsbak, the founder of BioAM, a group that promotes life sciences entrepreneurs through meetups, events and advocacy.

"The thing we learned … is that you really want that dense core, with people working very close together. That tends to breed more start-ups," said Sundsbak.

He wants to see the construction of a shared "wet lab" space in Rochester that could be used by life sciences entrepreneurs, believing it would speed the growth of start-ups.

A co-working model, popular in places like Berkeley, Calif., would include centrifuges, hoods, incubators, chemicals and basic equipment in space that could be rented out.

"There's a lot of people poised to do amazing things, but they need the space," Sundsbak said.

Dr. Atta Behfar, director of the cardiac regeneration program and the Advanced Product Incubator, said it should begin manufacturing in the first quarter of next year.

The lab will take two decades' worth of know-how in stem cell research and turn it into off-the-shelf therapies that "would be like taking aspirin," he said.

Some of the early products could include things like a gel to help diabetics with non-healing wounds, or help new mothers with injuries from giving birth, or orthopedic therapies for bones that aren't healing well and even cardiovascular technologies to help patients with heart damage.

Scientists can use the incubator to produce a drug, a biologic or a device that meets U.S. or European manufacturing requirements, said Behfar. The Mayo Clinic will operate the facility, but expects to work with outside biotech firms to manufacture new products.

"What we're hoping for by having these types of capabilities is we will be able to breach that critical mass and get the ball rolling to attract biotech firms to Minnesota," he said.

His view of biotech hubs like San Francisco is that they're reaching a point where it's too expensive for a new grad student to go work there.

"When you look at [Rochester] from a cost-of-living standpoint — schools, livability — it's all there," he said. "More and more this is what people are looking for. As San Francisco and Boston get overheated and astronomically expensive, I think people will look here."