Life sciences industry outlook.

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On a sunny morning tinged with the feel of impending fall, experts from Utah's biomedical and biotechnology industries gathered in the downtown boardroom of Grant Thornton for Utah Business magazine's tenth Industry Outlook round table discussion.

Their conversation ranged from the current economic climate's effects on business to the continued repercussions of 9/11 to new product offerings. Obviously, these local CEOs, presidents and vice presidents are seeing their companies impacted by the volatility of the world today.

Participants included Wayne Barlow, Wescor, Inc.; David Clark, NPS Pharmaceuticals; Kelvyn Cullimore, Dynatronics Corporation; Roger Evans, Cephalon, Inc.; Steve Hamilton, Aciont, Inc.; Michael Keene, Utah State Department of Community and Economic Development; Pratap Khanwilkar, Medquest Products, Inc.; Kelly Powers, C.R. Bard Access Systems; Larry Rigby, Zars, Inc.; and Steve Sanders, Watson Laboratories, Inc.

Special thanks to Brain Moss, president of the Utah Life Sciences Association, for moderating this month's discussion.

Despite challenges to the industry, participants were enthusiastic about the scientific and medical contributions their companies have made to public health. As Moss stated, "We are able to control and prevent diseases at an unprecedented level in the history of mankind, and that is accelerating rather than decreasing."

How has our industry been affected by the events of 9/11?

CULLIMORE: The core business hasn't been terribly affected. What has been affected has been the capital markets, so if you're a public company or even a private company seeking some sort of capitalization or equity or debt financing, there's definitely been a change in the market.

BARLOW: Exporting your products, there's a lot more scrutiny now, particularly if they're going anywhere in the Eastern part of the world. We're having to make sure we don't do something we're not supposed to do in shipping product to an embargoed country.

KEENE: There has been a sudden influx of funding for infectious disease. As you put research funding into chronic diseases such as cancer, diabetes and heart disease, at the same time is the potential for a long-term crisis with antibiotic-resistant infectious organisms. You are going to see products down the road that will have a benefit for fighting disease and treating health, but I worry about the lack of a balanced strategy going forward, and not just sucking funding from things like cancer and other degenerative diseases solely for bioterrorism.

BARLOW: So much money is being put into war efforts, there's not money available to do other things. Where the federal government was operating toward a surplus, now we've got the reverse happening. The symptom that is going to affect all of us is the active movement in Congress to revisit the issue of user fees. It's another barrier to entry, and it's going to have a negative impact on the industry.

SANDERS: There's focus on internal policies and procedures and protection and travel, import/export issues with pharmaceutical products and suppliers, but the core business of supplying medications to the American public hasn't changed that much, and that business has to continue in spite of additional burden on the industry.

RIGBY: The capital market has changed most dramatically. It hasn't had the effect on us yet, but we haven't been out for a round since 9/11. We're facing that with some trepidation, because the whole scenario has been altered. Not only (9/11) but because of the stock market. Those two factors create a very ugly environment for us.

The industry has difficult times financially, but we seem to be moving forward. How are we progressing or falling back?

CLARK: As long as you continue to make progress in the biological sense, and as the capital markets are accessible, then we continue to make progress.

KHANWILKAR: We have had success in Utah, but we are also looking for external funding, and it's difficult. You're lucky if you have a patient investor who has already invested enough, otherwise (you'll) be on the street. It is difficult to take the next step in Utah. Utah has great infrastructure. It has a great mix of the university, hospitals and industry. We can communicate with each other. It's a great place to start a company, but then to take it to the next level is the hard part.

CLARK: One of the challenges that we're faced with is bringing in additional talent. It's not that people are not attracted to Utah. The lifestyle and the setting is a plus, but our industry is still so small, it's tough to recruit top people here to make a commitment to a community where they know that if something does go wrong, and there is a risk in this industry, that they'll have something else to do without having to move again.

KHANWILKAR: In the cardiovascular device space, people will more easily move to Minneapolis, because that's the hotbed of our industry, but if our company does not succeed, then the people who have been here don't have much of a choice and don't want to be moving. They love the community Once people move here, they never want to go back.

RIGBY: There is a core group of us in Utah now that we steal from. It's easier to get somebody here in the valley already. The indigenous development of talent is a phenomenal thing here. The University remains a gold mine in terms of early-stage talent. We found that we can bring people in and train them. We use senior consultants outside the state on an as-needed basis...