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Kansas City: Capital of the animal health universe? By Richard Daub Joerg Ohle, president and general manager of the Bayer North American Animal Health division in Shawnee, Kansas, referred to Kansas City and the surrounding region as the "galactic center of animal health". Animal Pharm's Richard Daub visits Kansas City to find out more about the initiative. When Animal Pharm recently asked Mr Ohle about this comment, he downplayed it as a lighthearted remark made during a "fun meeting". However, it is this sentiment that led to what eventually became officially known as "The KC Animal Health Corridor," an initiative formed by the Kansas City Area Development Council (KCADC). It aimed to turn the region between Manhattan, Kansas and Columbia, Missouri, home of the "largest single concentration of animal health and nutrition interests in the world," into the animal health equivalent of the IT industry in Silicon Valley, California, and the scientific research industry in Research Triangle Park, North Carolina. Lynn Parman, vice president of the life sciences and technology development division of the KCADC, said: "We have 13,000 employees and counting that are working in the animal health sector in our region, the largest concentration of animal health workforce in a given area," says. "We also have four vet schools that are located within a 300 mile radius of Kansas City, and that produces a workforce pipeline coming out of those animal science and veterinary programs coming into the Kansas City metropolitan area." "cow town" Yet, with the cattle industry in the region having created the need for a significant presence of veterinarians and animal health researchers, the high-tech industry that has emerged is directly linked to its "cow town" heritage. According to the Bayer Animal Health's History of Animal Health, Haver-Glover Laboratories was founded in Kansas City in 1921 to market veterinary instruments, surgical supplies, and pharmaceuticals. The book Little Known Industries of Greater Kansas City says that by 1929, around 150 different animal medications were being produced in the area. In 1974, Haver-Glover, which by then was known as Cutter Laboratories, was bought by Bayer, which is now located on a 52-acre campus in Shawnee, in the western suburbs of the city. Three years prior to the founding of Haver-Glover, some 50 miles east of Kansas City in the town of St Joseph, Missouri, a man named W True Davis Sr founded Anchor Serum. This was after he developed a serum to treat cholera in his own pigs. The company eventually became the world's largest producer of serum for hog cholera, a disease that killed 8 million pigs in 1926 and was not eradicated in the US until 1977. By 1981, the company was known as Philips Roxane and was bought by Boehringer Ingelheim to form its Vetmedica subsidiary. "One of the main reasons why the animal health industry started here and continued to grow is because we are surrounded by agriculture," said Ms Parman. "That's one of the foundational reasons why companies like Anchor Serum - began here, and one of the main reasons why the industry started here." straddling two states In the past, this distinction sometimes caused friction and rivalry. But, with the potential of the global animal health industry to turn the region into an economic juggernaut, parties from both sides of the border have entered a new era of cooperation. The two sides appear so surprisingly different. Kansas City is busy transforming itself into a high-tech metropolis, while St Joseph seems content in retaining its more rural identity. However, their goal is ultimately the same, and if anything, their differences offer more choice for companies that may want to relocate to the region. While local business leaders are generally well aware of Kansas City's "cow town" heritage, few know what the region's main industry is today. Some sensed that something was here, but they weren't exactly sure what it was. "I've been here for a long time and didn't realize what we had here until they actually quantified it," said Rick Thaemert, senior vice president and senior partner with public relations firm Fleishman-Hillard. Bob Walker, Bayer Animal Health's director of communications and public policy, said that the strength of the industry here now was in the region's heritage. "That heritage goes back 100 years or more," he said. "This is a livestock area - agriculture is in all of our blood. It's an industry that we can support with little controversy. This is our heritage, this is animal health, this is taking care of animals, this is the human-animal bond." However, despite the proud heritage, it was actually a newcomer that bridged past and present and started building for the future with an effort that would quickly evolve into the Animal Health Corridor initiative. That newcomer was Joerg Ohle, who in 2005 arrived in town after spending nine years in Singapore as head of the Asia-Pacific segment of Bayer HealthCare. After settling in and assessing his new division, he discovered that it was involved in various community activities such as sponsorship in a Senior PGA golf tournament, science education programs for children, work with the Mercy Children's Hospital, and various other projects. While this work was rewarding, Mr Ohle believed that there was more to the picture than what he was seeing. He expressed this feeling to members of three of the major local civic organizations - the Greater Kansas City Chamber of Commerce, the Kansas City Area Life Sciences Institute, and the KCADC. "They all tried to get their arms around the question, 'What kind of industry heritage do we have here?' They wanted to find areas that could help grow Kansas, and one of the areas they looked at was the animal health industry. "Previously, when somebody talked about animal health, I believe they pictured feed lots and things in the ground and the paddocks they passed when they built the country. What people started to learn, though, is that this is a high-tech industry. They wanted biotechnology, they wanted life sciences - everybody wanted the buzz words. So, we took a piece of our heritage and asked, 'How is this part of life science?' "Then all of a sudden they discovered that there are much more synergies and links into this, which helps the whole industry. This is something highly sophisticated where you need all new research, and the demand for the FDA [the US Food and Drug Administration] is getting higher and higher, and so you have to put more research and knowledge into this. The more that you can link this to the pharmaceutical industry, the better it is. So there was this swing in perception from raising cattle to this being a high tech industry." animal health hub Ron Brakke may know more about the animal health industry than anyone else in the world. He is the president of Brakke Consulting, an international consulting firm for animal health and other related industries, and he first came to Kansas City in 1965 in the heyday of "cow town". While Mr Brakke was not surprised at what he had found, many others were. The report, published in July 2006, included some surprising statistics (see below).
Perhaps the most surprising statistic was that the companies in the region accounted for $1.4bn in annual animal health product sales (not including the feed additive market). This represented 27% of sales in the $5bn US animal health market and 30% of sales in the $14.2bn global animal health market. This figure that has already climbed to 32% of a $15.2bn global market since the publication of the Brakke report. "There has always been a core, a basic animal health business in Kansas City, mainly because of the pork industry," said Mr Brakke. "It was close to the cattle and swine markets. It wasn't necessarily a big metropolitan city, so the companion animal area was not that much. So, many of the companies were actually born here because of pork, and the packing plants used serum to develop cholera vaccines. These companies got started because of that, and then they got into other products. Then, as new technology came along, new vaccines were developed. Also, the universities here have very good technology." Ms Parman said that many of the service providers in the area made their living working with animal health companies. "We have communication firms, architecture and engineering firms, publishing companies, and accounting firms that actually have their practices built for the animal health industry." "There are advertising agencies here that you don't have to explain to them what the hell a cow is," said Ron Brakke. "That's part of what you get here, a core support group. Not only in manufacturing, but also core support which is very helpful." Mr Ohle said: "Whenever I think about the industry, the more people that are here, the better I can build my network and create opportunities for growth. It is something very simple like the legal companies here, the advertising companies who are a support network, for companies in the animal health industry. I personally believe cooperation, the sharing of information, externally and particularly internally, and connecting dots between functional units, is the key factor of success. If you want to grow fast, you need partners on the outside, and that's what we started." Mr Brakke said that the concentration of companies also made executive recruiting easier, because if a better opportunity with another company came along, he would not have to uproot his family and move to another part of the country. analyzing the Brakke report "We decided whatever we do, we want to make those companies in the area more successful than any other company, which resulted in the Animal Health Corridor. "We defined the Corridor. We are here for these companies - If they see the success, we are prepared to attract other companies to come here. And then very often the question comes, 'What is the benefit of all this?' I think I'm not the only one who has the difficulty of being located in the Midwest. For some people, the West Coast and the East Coast is where the business is. You have New Jersey, you have for the IT area Silicon Valley, you have the Research Triangle in North Carolina - that's where people have their networks, and they don't want to leave those networks. So the first piece was to get these people here, build this huge network, make it visible first in the area, get the buy-in nationwide and then internationally, and show people what we have and then attract them to this industry, because it's a good industry that's growing fast." The second piece of the story was how to connect the dots. The Life Sciences Institute said it would give grants to companies who were prepared to work with universities in the area. Attracting research automatically attracted researchers, said Mr Ohle. Research, said Ms Parman, was one of the primary focuses of the initiative. "The focus of the Kansas City Area Life Sciences Institute is to grow the research that's occurring and the collaboration between our area universities - in particular, Kansas State (K-State) and the University of Missouri (MU) - and our private sector companies," she said. "They actually created a comparative medicine grant program that they will give up to a $50,000 grant per product if K-State or MU or a local research organization is involved." IdentiGEN In July 2006, a month before the official launch of the initiative, IdentiGEN, a Dublin, Ireland-based manufacturer of DNA-based products for the agriculture and food industries in Europe, announced that it was opening a new US subsidiary in Lawrence, Kansas. This was to enable the Dublin-based company to commercialize its TraceBack DNA tracking system in North America. "IdentiGEN's decision to locate in the Kansas City region demonstrates the assets that the region offers to animal health companies competing in global markets," said Kansas City Area Development Council president and chief executive Bob Marcusse. A month later, veterinary diagnostics manufacturer Synbiotics announced that it was relocating its headquarters from San Diego, California, to Kansas City. Synbiotics' president and chief executive Paul Hays said the main driver in deciding to move was to bring Synbiotics closer to its customers. "We evaluated our sales, and at least 70% of our revenue comes from the Eastern and Central time zones, so we recognized that we need to move closer to the customer so that we would not miss chances to meet them and could meet more frequently and be able to meet in one day if necessary. So, physical location here in the Midwest made a lot of sense to us." Being closer to the customer, said Mr Hays, was also about having employees who understood the customer. "In San Diego, we have quite a strong life sciences practice," he said. "But these are not people who understand animal science, in particular the veterinary profession. So we had difficulty attracting people who have been raised or educated in the area of animal science when we tried to find them locally. We felt that that a Midwestern location would enable us to be physically closer to the customer and able to attract employees who understand the customer. We want to find people who understand immunology in both food animal herds, flocks, as well as companion animals, who understand what we're hoping to do when you vaccinate, and what an immune response means. We see this as an area where we can help, and we see this as an area in the Midwest where you can identify people who are trained and educated." Another factor in the decision to relocate was the potential for partnerships. "In the Kansas City area, the assets involved if you put biological sciences, vaccines and biology are very high for animal health," said Mr Hays. "So, for us one of the great accompanying partnering opportunities we have is to be able to partner with some of these vaccine companies who are introducing new vaccines and help them with the diagnostics that can create awareness that the disease exists. For example, K-State is looking at new strains of porcine circovirus, and if we can help create awareness of this new strain by providing a diagnostic that can differentiate the strain versus the normal strains, we can make the vaccine company seem more successful to the owner." Cost was another factor in the decision to move to Kansas City. "San Diego is very expensive," said Mr Hays. "We compete with the best human research companies in terms of salaries - I'm convinced that the Midwestern work ethic is something we're going to benefit from too." In October 2006, the US Animal Health Association (USAHA), a voluntary, non-profit forum of over 1,400 members with a mission to protect animal and public health, also announced that it was moving its headquarters from Richmond, Virginia, to Kansas City. outdated disease center The US Department of Homeland Security is currently scouting 18 sites in 11 different states for a 500,000 sq ft, $451m facility that would bring in an estimated $3.5bn to the local economy and create 500 jobs for some of the top scientists in the world. Three of these sites are located within the confines of the Animal Health Corridor (Columbia, Missouri, and two sites in Kansas - Leavenworth and Manhattan). The 18 sites will be narrowed down to five next month, and the final selection is expected to be made in 2008. The facility is expected to be fully operational between 2013 and 2014. While the competition is strong, many at K-State believe the site right next to their campus has a legitimate chance of winning this high stakes bid. This is because K-State is not only one of the premier animal science schools in the US, but construction of a $54m 34,000 sq ft biosafety level 3 facility, the Biosecurity Research Institute (BRI), has just been completed. BRI is part of K-State's plan to enhance its food animal program, the efforts of which have already attracted some of the leading food animal veterinarians in the world. University officials believe the facility will be a valuable training and collaboration resource for NBAF. Dr James Stack, BRI director and a professor of biosecurity at the school, sees the willingness to invest in such a costly project as a sign that infectious diseases are finally being recognized as a major threat, of which animal health is a crucial component. It is also a sign that the concept of "one medicine", the linking together of human and animal health, is coming back after decades of being sidelined by research into chronic diseases such as cancer and heart disease. "The records are pretty clear right now that for about the last 50 or 60 years, most of the deaths in the world from infectious disease are due to zoonotics, those organisms that can jump from animals to humans," said Dr Stack. "So, when you start considering human health, to do that without considering animal health is only part of the story. "The US Surgeon General in 1969 made a statement that the era of infectious disease is over, which was a little premature. And there were consequences to that. Our public health schools stopped emphasizing infectious diseases and went to chronic diseases, so our public health people know a lot about diabetes and cancer and heart disease and things like that, but in fact the training in infectious disease is very poor." Dr Stack said that 9/11 and the anthrax attacks that followed not only changed perceptions of the world, but also made people realize that bioterrorism was a serious threat. "It also made us start looking at what was really going on in the world, and, again, infectious disease is increasing," he said. "We have to pay attention because infectious diseases are going to reemerge as a major health issue for the world." He said that the world was experiencing greatest movement of agricultural products over the greater distances over shorter periods of time than at any time in history. When they are moved, insect pests, and pathogens are also moved. Therefore, the BRI was created to look at infectious plant diseases, infectious animal diseases, and food safety pathogens under one roof. He said that this sort of capacity did not exist in other places. Dr R W Trewyn, vice provost for research and dean of the Graduate School, also believes that the "one medicine" concept is where the health community is headed. "Interestingly, decades ago, there was a tighter integration side in the public health arena nationally," he said. "It has sort of dissipated over the years, but now there's a real importance with the zoonotic diseases being major pandemic threats. So we really do think this offers a great opportunity for us to partner with the public health community around the country in very significant ways." In addition to an 185,000 sq ft veterinary teaching hospital, K-State is home to a unique program called PharmCATS (Pharmacology, Clinical, Analytical, and Toxicological Services). It is run by the University veterinary laboratory and operated as a non-profit organization to "provide high volume, rapid throughput bioanalytical services focused on the identification and quantification of exogenous compounds such as drugs and toxins in biological matrices". Dr Michael Apley, associate professor of food animal production medicine, said that the lab was unique because it was a non-profit corporation wholly owned by the university that operated in an academic environment. "There are four board-certified veterinary clinical pharmacologists working in association with two analytical chemists to provide services for analysis of samples coming from pharmacology, clinical, analytical and toxicological studies," he said. "There's a wide breadth of things we can do, and we're capable of filling in specific holes that an entity may have in their development or research needs - Our mission is rapid turnaround and very accurate analysis of both the samples and the data in either conventional or Good Laboratory Practices (GLP) environments." Dr Lisa Freeman, associate dean for research and graduate programs, said that this structure gave it a unique opportunity to partner with industry to create a GLP environment and do things that would typically be very difficult to do within the structure of a traditional academic department. "Given the emphasis on the Animal Health Corridor, I think that this effort really embodies everything we want to do in the greater Kansas City area in terms of economic and workforce development and advancing the universities in animal health," she said. rest of the world "I think the next ripple out is going to be an international presence to really start looking at this not just from all these companies based in the Midwest, but all of these companies that are doing international work," he said. Another transition could be the shift from a geographical leadership to more of a "thought" leadership on new vaccines or comparative medicine, he said. Ms Parman said that last year, there were probably four or five animal health-related companies in the pipeline, and now there are 15. "It really is catching momentum." |
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