September 4, 2008 / 12:27 AM / 9 years ago

Czech city bids to be global biotech hub

BRNO, Czech Republic (Reuters) - Just a few steps from the monastery where Gregor Mendel pioneered the field of genetics some 150 years ago, Czech officials hope to nurture their own biotech revolution.

The plan is to turn Brno, a 13th-century city that went the way of manufacturing under communism, into a modern biotech hub and attract firms eager to tap into a skilled work force, even as a strong currency drives up costs and wages.

“We are trying to connect industry, education and infrastructure to make it easier for companies to come here to create an environment that suits biotech companies best,” Brno’s mayor Roman Onderka told Reuters.

The Czech Republic now hosts around 60 biotech firms, mainly near Brno and the capital of Prague.

But the key for Brno -- the country’s second biggest city -- is a partnership with the U.S. Mayo Clinic, the research centre renowned for treating rare medical cases and famous patients including former U.S. President George H.W. Bush.

Announced in 2006, it will help the country play on historic strengths in medicine and research and hopefully become a regional force for more than just cheap labor, said Tomas Sedlacek, chief macroeconomic strategist at Czech bank CSOB.

Establishing the Czech Republic as a research hub could keep the economy humming when wages rise enough to convince low-cost manufacturers settled here to move jobs elsewhere, said Sedlacek, a former government adviser.

“The government was pinning its hopes on this partnership,” he said. “It would be wonderful if the Czech Republic could become a clinical research centre or something like the hospital of Europe.”

Over the last decade, the Czech crown has been one of the world’s best performing currencies, fuelled by economic growth of around 5 percent a year and investors’ expectations that returns on Czech investments will catch up with those in richer neighboring countries.

That is making it more expensive to do business in the country. But Alexandra Rudysarova, chief executive of CzechInvest, which promotes investment, argued Brno’s biotech push shows the nation offers far more than just low-cost labor.

“We strive to lure investments into sectors such as biotech that provide high added-value and where investors are far less tempted to relocate to cheap countries east of our borders,” she said in an e-mail.


The venture in Brno, about halfway between Prague and Vienna, marks the first time the Mayo Clinic has looked abroad and is one of four potential new research centers for the city.

Virend Somers, international director and a researcher at the Mayo Clinic, said Brno offers a pool of expertise.

“The fact it is very much a university town is so important to make a venture like this successful to help drive creativity,” he said. “We had also been very impressed by the technical expertise of the Brno physicians and engineers we met on earlier collaborations.”

The government plans to invest some $500 million to support the four potential projects -- with some money also coming from the European Union -- as the city seeks to compete directly with long-established biotech hubs in California and burgeoning ones across Asia, all looking to tap a fast-growing industry.

Global biotech sales grew by 12.5 pct in 2007 to more than $55 billion, double the 6.4 percent pace seen in the worldwide pharmaceutical market, according to market research company IMS Health.

The plan for Brno also includes a “Medipark” life science campus at Masaryk University, a regional EU centre focusing on biotech, and an electron accelerator to aid drug development.

Tax breaks, lower wages, good transportation links connecting eastern and western Europe and a large student population that provides a skilled, English-speaking workforce have long attracted technology companies such as IBM, Honeywell and Siemens to Brno.

Ten years ago, biotechnology was virtually non-existent in eastern and central Europe, but skilled workforces and relatively low costs helped incubate the industry in countries like the Czech Republic, Hungary and Poland.


The fledgling International Clinical Research Centre is located near the 14th-century abbey where Mendel’s experiments with plants started the gene revolution that gave the world biotech drugs and genetically modified crops.

It was there that the German-speaking Augustinian monk worked out the basic laws of inheritance by painstakingly cross-breeding thousands of pea plants.

Other scientific leaders associated with the city include Ernst Mach -- whose work resulted in the Mach numbers used to gauge supersonic speed -- and Viktor Kaplan, inventor of the Kaplan water turbine.

The new International Clinical Research Centre will be one of the EU’s largest biotech and medical research projects and will showcase new projects aimed at luring researchers and biotech companies, officials say.

“There aren’t many centers in the world that offer the combination of basic science to preclinical research to development of drugs, devices and technologies,” said Dr. Tomas Kara, the centre’s chief, who is also a researcher at the Mayo Clinic in Rochester, Minnesota.

When it gets fully up and running in 2010, the facility will provide the tools and training to help scientists from around the world more quickly turn their ideas in the lab into drugs and technologies people can use, Kara said.

Current projects at the clinic, which will focus mainly on heart disease, neurosciences and oncology, include a computer program to prescribe drugs based on a person’s genetic profile.

So far researchers from the Mayo clinic and Brno have published 14 papers and won three U.S. patents for medical devices, including one to better monitor the relationship between the brain and heart.

A primary goal is developing new technologies like these and conducting independent medical research -- rather than drug development -- and providing resources for scientists to conduct their studies in Brno and then return to their home country, Kara said.

“It will work on the same concept as the international space station, which means adjusting the centre based on the needs of each project,” said Kara. “We want to bring the best scientists in the world to one place. We hope that one day Brno could be the Silicon Valley of medicine and biotechnology.”

Editing by Maggie Fox, Michael Winfrey and Sara Ledwith

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