A new breeze in the valley

Fledgling biotech sector is attracting young professionals

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Print this page by James Hefferman

As a graduate student in biomedical engineering at the University of California, Berkeley in early 2007, Doug Watson began hearing whispers about SRI International’s plans to establish a drug research facility in the Shenandoah Valley in Virginia. The former Richmonder and his wife, a valley native, wanted to return to Virginia, but the rolling farmlands and storied battlefields of the Shenandoah Valley seemed a far cry from the towering bioscience hubs of San Francisco and Boston.

By December 2007, however, the whispers had become a full-throated announcement: SRI was breaking ground on a 41,000-square-foot Center for Advanced Drug Research (CADRE) in Rockingham County and setting up shop at nearby James Madison University while the construction was under way. By the time Watson had earned his doctorate in 2009, his dream job was waiting for him in a new research and technology park on the outskirts of Harrisonburg.

The move has paid off. “We love it,” Watson says of the valley. “My wife’s family is from here. We love the scenery, the access to nature and the Shenandoah National Park, the quality of life and the affordability.”

And he enjoys the work. CADRE’s research, supported by federal grants, corporate clients and private foundations, focuses on life-saving treatments for global health problems, primarily in the area of infectious diseases. Among Watson’s current projects are developing a diagnostic test for a deadly fungal disease that can crop up during chemotherapy and engineering a protein to address Vitamin A deficiencies in developing countries.

“It’s a great work environment, sort of a hybrid between a for-profit company and academic-style research,” he says. “It’s very open and collaborative, with a high level of diversity in terms of expertise.”

The 29-year-old is exactly the type of young professional the valley is looking to attract to its fledgling biotechnology sector.

“From the day that I came, we have been looking to hire people locally who have the right skill set and are looking for a change, or who are looking to come back to the region,” says Dr. Krishna Kodukula, CADRE’s executive director. “And Doug is a wonderful example of that.”

More than 80 percent of SRI Shenandoah Valley’s 36 positions require advanced degrees. While CADRE has been able to find talent from outside the region for its initial phase of development, it is working with the Shenandoah Valley Partnership and local business leaders to develop its future work force. SRI researchers are participating in a grant-funded recruitment and retention effort led by JMU and three other universities to increase the number of students obtaining degrees in science, mathematics, engineering and technology.

“It’s a two-way street,” Kodukula says. “The schools need SRI’s advanced research capabilities, and we can tap into their resources and talent.” Six JMU students recently completed summer internships with CADRE.

With strong ties to higher education, a well-educated work force and a prime location for federal contracts, the valley is committed to expanding its biotechnology sector by providing shell space, laboratories and related commercial and residential development. “With that kind of vision, I would not be surprised if you see other research centers locate here in three to five years,” Kodukula says. The valley’s life-sciences sector also includes Merck & Co. (pharmaceuticals) in Rockingham County and Atlantic Research Group (clinical research management) and Cadence Inc. (medical instrumentation), both based in Staunton.

Robin Sullenberger, executive director of the Shenandoah Valley Partnership, expects great things from SRI’s presence in the region. “Harrisonburg and Rockingham County have worked jointly with JMU to promote SRI’s activity in the valley. When you have jurisdictions working well together, you create an atmosphere that’s conducive to business development.”

Area colleges and universities are becoming key players in that objective, Sullenberger says. “They all want to be more actively engaged in economic development.”

The region’s health-care sector received a shot in the arm in July when Rockingham Memorial Hospital (RMH), which recently relocated from downtown Harrisonburg to a new health campus setting east of the city, announced its intent to affiliate with Norfolk-based Sentara Healthcare (See related story on page 47.) The partnership should be cemented early next year. The arrangement ensures that RMH, a 238-bed hospital, can continue to provide community-based care while drawing on Sentara’s resources in an increasingly complex regulatory environment, says RMH chief executive Jim Krauss.

“The strength of an existing health-care system is one of most critical factors in economic development,” Sullenberger says. “RMH already had a strong reputation. Solidifying their activity for the future is not only important for them, it’s also important for what we’re trying to do.”

The new biotech and health-science facilities have helped to diversify the valley’s economy. Traditionally an agricultural region, the valley has become the home of many manufacturing plants and distribution centers along Interstate 81.

“Ag still has a strong presence here, as well as tourism and industry, and the I-81 corridor is a big draw,” Sullenberger says. “Moving products is a natural fit for the valley. We don’t have to do active recruiting in that area. We’re already on everyone’s radar screen.”

The region also is benefitting from foreign investment. Mercury Paper recently discovered Shenandoah County, opening a manufacturing and distribution center in Strasburg for its line of virgin-fiber, eco-friendly paper towels and tissue products. In March, the company and its corporate parent, China-based Sinar Mas Group, announced a $21.2 million expansion of the facility, to include the relocation of Mercury Paper’s North American headquarters from California, creating 150 local jobs. The project marks the largest-ever Chinese investment in Virginia.

CEO Philip Rundle says Mercury Paper chose Shenandoah County because of its strategic location, including access to emerging markets and the Virginia Inland Port, which the company uses to import raw materials from sustainable pulp plantations in the Pacific Rim. “Mercury Paper is a bellwether for our region,” Sullenberger says. “It’s the first major facility you see coming off I-66 and into the valley. It signals a strong business presence.”

Not to be outdone, the valley’s existing manufacturers have been flexing their muscles.

Polymer Group Inc., a global producer of non-woven fabrics for consumer and industrial applications, is investing $65 million to add a new line and increase production at its Waynesboro facility, creating 41 jobs.

In Winchester, O’Sullivan Films, which makes polymer films and finishes for the consumer, automotive and health-care markets, plans to add 174 jobs at its local plant courtesy of a $28.3 million investment from its new corporate parent, the Germany-based Hornschuch Group. 

In Frederick County, Kraft Foods, makers of the popular Capri Sun line of fruit-juice pouches, has increased production at its local plant and added 100 jobs.

Fisher Scientific recently completed a 41,000-square-foot addition to its clinical diagnostics facility in Middletown, across from Cedar Creek Battlefield.

Sullenberger says the business model for manufacturing in the valley has shifted toward more high-tech machinery and skilled labor. Still, he says, “the fact that these companies are growing and expanding … that is an industry signal to the strength of the valley’s business environment.”

Not all of the recent economic news in the valley has been positive. General Electric closed its Winchester plant in late September after 35 years in the city. More than 200 hourly and salaried workers were affected. The facility was the company’s lone remaining U.S. plant for making household incandescent light bulbs, which are set to become obsolete by the end of the decade under new federal lighting efficiency standards.

In recent years, consumers have started buying electricity-sipping compact fluorescent bulbs, which last longer and produce less heat than their tungsten-filament counterparts. The majority of CFLs are manufactured by hand in China. GE considered retrofitting the Winchester plant to produce more energy-efficient bulbs, but the move would not have been profitable, company officials said.

With four of the state’s top five farm counties — Rockingham, Augusta, Page and Shenandoah — agriculture is still at the top of the list for economic development in the valley, Sullenberger says. Within the sector are a number of promising renewable-energy initiatives, including biomass, wind power and converting poultry litter into fuel.

The seeds have been sewn for additional economic development projects, such as data centers, but Sullenberger says it will take some time before they bear fruit.

Meanwhile, the valley continues to build on its reputation as a strong regional destination for the arts with the opening of JMU’s new Forbes Center for the Performing Arts. The 175,000-square-foot center features live performances from the university’s School of Theatre and Dance and School of Music, as well as guest artists.

Country music star and JMU alumnus Phil Vassar kicked off JMU’s Masterpiece Season with a concert at the center in September, while audiences in October enjoyed the contemporary musical “Alarm Will Sound 1969,” the mock opera “Dueling Divas” and a tribute to jazz great Mary Lou Williams. Still to come in 2010 are performances of Mozart’s opera, “The Marriage of Figaro;” a touring exhibit of letters and photographs from a Polish girl’s time in Nazi labor camps and the Virginia Repertory Dance Company.

The region’s quality of life remains “our ace in the hole” when it comes to economic development, Sullenberger says. Doug Watson can vouch for that. That’s one of the reasons he is working in Virginia instead of California. “It’s really the best of both worlds.” 

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