Friday, November 14, 2008

ThirdBiotech rebuffed in merger effort

[Source: Angela Gonzales, Phoenix Business Journal] - A relatively new biotechnology networking group is proposing a merger with the Arizona BioIndustry Association, but so far it hasn’t gained any ground.

ThirdBiotech has been offering networking events for the past year, and last summer it created a research group to help biotech startups build their businesses. Founder Jeff Morhet wants to broaden the scope of the organization and merge with the Arizona BioIndustry Association.

“In this type of market and this type of economy, this is the way to be able to put together a movement that ensures the public and private sectors are working together and are focused on job growth and fueling the life sciences economy,” said Morhet, who also is president and CEO of InNexus Biotechnology Inc.

He has been corresponding in person and by e-mail and phone with AZBio President and CEO Bob Eaton as well as board members, but so far the association hasn’t expressed any interest in merging.

Because ThirdBiotech has not submitted a proposal in writing, the association won’t consider the merger, Eaton said.

“As always, AZBio remains open to collaborating with ThirdBiotech or any other organization if such a collaboration would advance the interests of our member companies,” Eaton said.
AZBio has about 120 dues-paying member organizations, while ThirdBiotech has about 300, charging $49 a year for individual membership dues.

AZBio charges annual membership dues based on the number of employees, ranging from $100 for a biotech company with one employee to $2,500 for a company with 200. The range for institutional members, such as universities and nonprofit organizations, is $100 for those with one employee to $1,000 for those with 50. Associate members — for-profit, nonbioscience companies — pay up to $3,000.

ThirdBiotech is beginning to offer annual sponsorships rather than membership packages to corporations, ranging from $500 to $10,000. Tiered sponsorships would include admission to a certain number of ThirdBiotech events, recognition on the organization’s Web site and other benefits.

“We have not received any specific proposals for any kinds of collaborations or anything else,” Eaton said. “If we do, our board will review it and decide how they want to deal with it.”

Morhet said he is frustrated because he has sent numerous e-mails outlining his proposal, and has sat down with board members to discuss the matter.

“I still keep that hope open,” Morhet said. “Given what’s happening in our economy, there’s no better time for people to think outside their own organizations and find ways to collaborate and move our overall movement forward.”

In an e-mail response to one of Morhet’s requests, Mike Mobley, chairman of AZBio and associate director of The Biodesign Institute at Arizona State University, wrote: “AZBio has always been open to collaborations that will advance the interests of our more than 120 member organizations. However, recognizing the disparity between the resources, membership and affiliations of AZBio and ThirdBiotech, the AZBio board would not be inclined to consider the integration of AZBio into ThirdBiotech at this time.”

Mobley’s e-mail went on to invite ThirdBiotech to become a dues-paying member of AZBio.

When Mobley was contacted for comment on this story, Eaton responded on behalf of the board.

Despite the association leadership’s desire to remain separate organizations,
AZBio board member and Flinn Foundation Vice President Saundra Johnson said she applauds ThirdBiotech’s commitment to the state’s biotech industry.

“The group brings diverse talents and resources to the table that can make a difference,” she said.

AZBio was created in 1997 as the Arizona Bioindustry Cluster. It changed its name in November 2003, and in July 2005 it secured a three-year grant from The Flinn Foundation to support its statewide educational outreach efforts.

Johnson said Flinn is considering a second round of financing for AZBio.

Its first president and CEO, Jon McGarity, who declined to comment, left the association in May 2007 to run a biotech company. Eaton took his place in October 2007.

In February, the association merged with the Bioindustry Organization of Southern Arizona in Tucson, creating a statewide association. The group offers mixers, workshops and advocacy, as well as purchasing power via its affiliation with the national Biotechnology Industry Organization.

Morhet said the state’s growing biotech industry could benefit from merging the two organizations, rather than duplicating services.

ThirdBiotech’s research group is working with venture capital groups to connect them with biotech companies in Arizona.

“Companies need to be fueled with investments,” Morhet said. “We want to find ways to connect Arizona-based companies with investors.”

Arizona BioIndustry AssociationFounded: 1997 (as Arizona Bioindustry Cluster)President and CEO: Bob EatonHQ: PhoenixMission: Seeks to unify, empower and advance its member organizations, which collectively form Arizona’s bioscience communityMembers: 120 companiesdues: Range from $100 to $3,000 a year, depending on the size and scope of the businessWeb:

ThirdBiotechFounded: 2007President and CEO: Jeff MorhetHQ: ScottsdaleMission: Started as a networking group; now includes ThirdBiotech Research Group, a nonprofit organization whose mission is to promote the development of science, technology and intellectual property to drive the formation, advancement and growth of Arizona-based biotech companiesIndividual Members: 300Annual dues: $49Corporate sponsors: 12Web:

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