Borderless Biotech

& Mexicos Emerging

Life Sciences Industry

a briefing paper by San Diego Dialogue

a division of UCSD Extension
with generous funding by Merck & Co. Inc.
developed under contract by Crossborder Group Inc.

June 2007
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- []

Executive Summary
The San Diego Dialogue, a program of University Extension at
the University of California, San Diego, has spent the last three
years focusing on issues of innovation and competitiveness in
the crossborder region. On the heels of the 2006 publication of
a major research report on the San Diego/Baja California Region, Borderless Innovation, a relationship was established
with the global pharmaceutical company, Merck and its subsidiary, Merck Sharpe & Dohme in Mexico City. Merck has had a
longstanding commitment to innovation in the United States
and, in recent years, its attention has turned to innovation in
Mexico and Latin America. With support from Merck, the San
Diego Dialogue launched a Life Sciences Gateway Initiative, with
four strategic life science regions identified by Merck in Mexico
Guanajuato, Jalisco, Morelos and Nuevo Len. The focus of
the partnership has been to build long term relationships between the R&D, technology commercialization and life science
business communities in Mexico with their counterparts in California and across the United States.
This briefing paper is an initial look at the multiplicity of opportunities that exist in Mexico. It provides
some insight into what may be the barriers to harnessing necessary capabilities on the part of the
Mexicans, but also vis--vis perceptions of Mexico by the life science clusters in San Diego and Orange
Counties. The report highlights the contributions Mexican scientists and companies have made to the
development of life sciences, and provides introductions to the regions identified by Merck. It is also
a reminder of the capabilities of Baja California, and their connection to the greater San Diego region.
What is significant to the U.S. is the extent to which Mexican regions are mobilizing national, state and
local resources to coordinate their research with economic and workforce development. This document points out that there has been notable growth in research activity across Mexico measured by
increasing numbers of research centers and science graduates, growth in patent activity, expansion of
incubators and infrastructure of innovation, and growth in advanced manufacturing and clinical trial
activities across Mexico.
These growing assets, and commitments from Mexico, represent a promising development for San Diego
and California. San Diego is one of the most vibrant life science research and development communities in the world. The level of research funding, combined with the amount of venture capital coming
into San Diego companies, means that San Diego has become a global hub in the life sciences arena.
The San Diego innovation community is linked to research, commercialization, investment and marketing around the globe, and as such, is an appropriate gateway for a life sciences initiative across Mexico.
This briefing paper is based on personal visits to the Mexican regions described in the report, as well
as a strategy for building relationships between the many partners in any effective innovation system.
Seminars and roundtables over the next 12 months involving peer-to-peer interactions of leadership
from Mexico with leadership in California will focus on IP strategies, venture investing, strategic
partnering in manufacturing and clinical research, as well as basic research partnerships in areas of
biomedicine and biotechnology. The data reported in this report will be amplified in subsequent white
papers, which will go into much greater depth about each of the regions. For the purposes of this June
Forum Fronterizo, this briefing paper has been developed as a way of informing and inspiring potential
partners, particularly in San Diego and across California, to investigate the opportunities to grow a
borderless life sciences community by engaging our friends and potential partners in Mexico.

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [1]

A Vision of Borderless Biotech

What do Genentech, the birth control pill, biomedical devices, and biotechnology have to do with
Mexico? More than most people think and that creates a unique opportunity for not just the United
States, but also for the California life sciences industry in particular. While much attention is focused
on Europe and Asia, several regions within Mexico are emerging as highly capable life sciences research
centers, as well as sites for current and future industry growth.
These regions, and the potential opportunity they present for collaboration with the San Diego and
California life sciences industry, are the focus of this first briefing paper and the focus of a 18-month
binational project launched last December, 2006, between UCSD Extensions San Diego Dialogue and
Merck Sharp & Dohme (Merck) - the Life Sciences Gateway Initiative. Working with government and
life sciences leaders in some of Mexicos most innovative regions (including the states of Guanajuato,
Jalisco, Morelos, and Nuevo Len), UCSD and Merck aim to build sustainable binational relationships
among researchers, scientists and investors for the purposes of stimulating and nurturing the lifecycle
of innovation.1
This collaborative effort joins together two separate ongoing efforts Mercks multi-year initiative to
promote life sciences in Mexico through research, events, and education; and San Diego Dialogues
2006 binational study, Borderless Innovation a groundbreaking report that analyzed opportunities in
the San Diego-Baja California region to increase the competitiveness of science and technology
industries. Combined with the efforts and activities within each region, the result is so to speak a
triple helix of life sciences leadership.
While not a focus of the current project, previous research done for the Borderless Innovation report
clearly demonstrated that Baja California is also one of Mexicos emerging life sciences regions. In
fact, each of the five states that will be discussed Guanajuato, Jalisco, Morelos, Nuevo Len and Baja
California have their own strengths and specialties. Most also share some of the same challenges that
can potentially be best solved through unified efforts, as well as shared opportunities.

Genentech and Mexican Innovators

In California in the late-1970s, Genentech was not as well known as it is today. One of its
co-founders, Dr. Herbert Boyer, was a professor of biochemistry and biophysics at UCSF,
where several members of his research team, including Mexican-born Francisco Bolivar and
Californian Ray Rodriguez, were diligently working to create a safe and effective biological
mechanism to facilitate cloning of special bacteria. Their answer: a plasmid vector a
small, self-replicating genetic element with built-in coding of enzymes that allow its host
a bacteria, for instance to thrive in environments in which many other bacteria cannot (for
instance, in the presence of antibiotics).
The resulting genetic package was the plasmid pBR322 (the B for Bolivar, the R for
Rodriguez) designed to be resistant to two antibiotics (ampicillin and tetracycline). When
placed into a fast-growing bacterial host like E. coli, pBR322 allows the altered bacteria to
be selected (screening negative bacteria). By subsequently modifying this plasmid to
carry human genetic materials, they were able to stimulate the production of certain
hormones by the bacterial host such as insulin. Once a modified plasmid vector like
pBR322 is coupled with a gene to promote insulin production and then inserted into an E.
coli bacteria, the result is a self-replicating, genetically-modified cellular factory that can
safely synthesize human insulin a process that helped to launch Genentech as a multibillion dollar company.

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [2]

Trends in Mexicos Life Sciences Clusters

In most discussions about the global life sciences industry, Mexico
is not usually considered a prime location for innovations and high
technology. This lack of general awareness, in fact, can be
demonstrated with a simple metric comparing the number of
hits certain phrases receive on the internet using the search
engine Google.

"GoogleTM Metric" of
Selected Search Terms
biotechnology
"san diego"
biotechnology
india
biotechnology
mexico
biotechnology
monterrey

3,010,000

2,010,000

1,300,000
133,000

Measurement of the
total number of

biotechnology
guadalajara
biotechnology
cuernavaca
biotechnology
irapuato

74,200

returned results
using the Google

48,000

15,400

search engine

TM

As seen at left, when combining the word biotechnology with

various phrases, such as San Diego, Mexico, Guadalajara,
etc., relatively few English-language pages apparently exist that
reference some of Mexicos biotech regions. While admittedly life
sciences-related activities are still an emerging part of the economy, and this Google metric is far from a perfect measurement of
the actual situation, it does provide at least an indication of the
perceived degree of biotechnology activity (and perhaps perceived
capability) in Mexico. That said, other indicators show more
positive signs.
US - Mexico Trade in
Biotechnology & Life Science Goods
(2003-2006, US$billions)

Trade Trends
3.0

What are these goods? The US Census Bureau defines these

Advanced Technology Products as:

2.5
US$ billions

According to the latest data from the US Department of

Commerce, trade between the US and Mexico in biotechnology and life sciences goods is on the increase. In 2006,
trade in these goods had reached nearly $3 billion in total
trade, and had an average annual growth of 15% between
2003 and 2006.

2.0
1.5
1.0
0.5
0.0
2003

2004

Biotechnology Products
US Exports
Focuses on medical and industrial applications of advanced scientific discoveries in genetics to
the creation of new drugs, hormones and
other therapeutic items for both agriculWhat are Life Sciences?
tural and human use.
Life Sciences Products
Concentrates on the application of scientific advances (other than biological) to
medical science. Recent advances, such as
nuclear resonance imaging, echocardiography, and novel chemistry, coupled with
new production techniques for the manufacture of drugs have led to many new
products for the control or eradication of
disease.

2005

2006

Imports

To use the definition outlined in the highly-acclaimed

2005 study by the Council on Competitiveness and
Global Bioeconomy Consulting, Catalyzing Cross-Border Innovation: The Mexican Life Sciences Initiative,
life sciences are:
...broadly defined to include all biological technologies and applications. This includes: biotechnology,
pharmaceuticals, plant and animal technologies, medical devices, healthcare (e.g. translational research,
clinical trials), biological related information technology (e.g. bioinformatics, telemedicine), as well as
biological-related production and manufacturing.

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [3]

Birth Control and the Dupont of Mexico

Mexicos innovations in life sciences have not been limited to the last two decades. In fact, one
of the pharmaceutical industrys early success stories the birth control pill has roots in
Mexicoliterally. Early steroid research in the 1930s showed that progesterone could inhibit
ovulation in women, but commercial applications werent feasible since steroids at that time
were isolated in very small amounts from animal glands an expensive process. Dr. Russell Marker
(a Chemistry professor from the University of Pennsylvania) developed an alternative process that
converted toxic steroids (sapogenins) into the pregnancy hormone progesterone. Dr. Marker also
discovered a viable source for this: the cabeza de negro a wild yam in Mexico.
In 1944, Dr. Marker and two entrepreneurs in Mexico City founded Laboratorios Syntex to develop
and commercialize crystalline progesterone. While Dr. Marker left after one year following a
dispute, Syntexs co-founders soon hired Dr. George Rosenkranz, who envisioned building Syntex
into the Dupont of Mexico. Dr. Rosenkranzs team of researchers including Dr. Alejandro
Zaffaroni not only were able to ultimately develop commercial quantities of progesterone, but
ultimately won an international race in 1951 to synthetically develop cortisone (beating out a
rival team from Merck, among others). Syntexs researchers also included Luis Miramontes, a
college student from UNAM in Mexico, who was instrumental in synthesizing norethindrone the
active ingredient to one of the two earliest oral birth control formulas.
In 1964, Syntex expanded to Palo Alto, California, where the talents of Drs. Rosenkranz,
Zaffaroni, and other Syntex alumni (including Dr. Carl Djerassi), helped contribute to the growth
of Californias life sciences industry

Trends in Life Sciences Education & Workforce

Raw trade figures tell one story. Another story can be revealed by the notable annual increases in
doctoral graduates specializing in key areas of science including Agricultural Sciences, Natural &
Exact Sciences, Health Sciences, and Engineering & Technology. While the number of those receiving
doctorates in these areas still is relatively small
an estimated 1,147 in all of 2005 the numbers
500
Annual Doctoral Graduates in Mexico
are nearly a five-fold increase over the last
450
By Area of Science (1987-2005, CONACYT)
decade (with a 17% average annual increase).
400
Its also useful to consider that these numbers
350
do not count the significant numbers of Mexican
300
scientists that are graduating from doctoral pro250
grams in the United States, Europe, and other
200
countries.
150
100

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [4]

2005

2003

2001

1999

1997

1995

1993

1991

1989

1987

50
Masters degree programs are also showing in0
creases that bode well for Mexicos biotech
potential. According to CONACYT (Mexicos
National Science and Technology Council), the
Agricultural Sciences
Natural & Exact Sciences
number of new students entering masters deHealth Sciences
Engineering & Technology
gree programs in life sciences-related fields has
more than doubled since 1995, from 674 students entering such programs to more than 1,500 in 2006. It should be noted, however, that these
positive increases have also raised some concerns about the possible lack of high-skilled employment
opportunities in Mexico to absorb these graduates - a critique that underscores the opportunity for
expanding companies to investigate this potentially underutilized workforce.

SNI Registered Researchers

By Area of Science

1,750

(1995-2005p, CONACYT)

1,500
1,250
1,000
750
500
Biology & Chemistry
Medicine & Health Sciences

250

An Update on Medical Devices and FDA

Registered Facilities
San Diego Dialogues 2006 publication, Borderless
Innovation, described biomedical devices one
component of the life sciences industry as a
ready opportunity for regional economic development efforts, particularly in light of San
Diego-Baja Californias largely untapped opportunity to become one of the major hubs of
biomedical device design, manufacturing, and
global marketing in the world. While that still
holds true from a regional perspective, such a
vision might also hold true for a California-Mexico
strategic relationship as well, particularly given
the high concentration of biomedical device companies in Southern California.
Looking at the global expansion of medical device
manufacturing, its also an opportunity that both
countries are at risk of losing: between 2003 and
2007, the number of China-based medical device
manufacturers registered with the FDA increased

Biotechnology & Agricultural Sciences

2005p/

2004

2003

2002

1999

1998

1997

1996

0
1995

Over the last decade, the number of scientific

publications that Mexico is generating in life
sciences-related fields has also more than doubled in some notable areas, including chemistry,
pharmacology, immunology, microbiology, and
plant and animal sciences. These last two areas,
in fact, appear to have relatively high global
strengths according to Thomson Scientifics
Essential Science Indicators, Mexicos microbiological publications are cited 39% higher than the
world average, and plant & animal science publications are cited 42% higher than average. While
this relative rating of citations isnt necessarily as
strong in other areas, it does provide an independent and global indicator of Mexicos increasing
scientific capability.

2001

In addition to positive educational trends in life

sciences, Mexicos National Researcher System
also shows some interesting trends. The SNI (to
use its Spanish acronym) is a voluntary but
screened registry of accomplished researchers in
Mexico.
As seen at right, between 1995 and
2005, the number of researchers registered in
health, biotechnology, and agricultural sciencerelated activities nearly doubled.

2,000

2000

The SNI & Life Sciences Publications

by 156% to over 2,600 companies. During this

same time, China also surpassed Taiwan as having
the largest number of foreign firms registered,
Korea (with a 93% increase in number of firms)
leaped over Canada and the UK, and the number
of registered firms from Mexico fell behind the
number of firms from India and Israel (the number
of FDA registered firms in these latter two countries
growing by 73% and 47% respectively, while Mexicos
numbers increased by only 12%).
While FDA registered firms are not necessarily a
perfect indicator (it doesnt, for instance, necessarily reflect employment or actual amounts of
goods traded), it does underscore the fast-moving
shifts that can occur in an increasingly skilled
global workforce. One state within Mexico that is
taking advantage of this opportunity is actually
right next door: Baja California.
In 2003, Baja California biomedical device firms
employed just over 23,700 individuals. Based on
2006 data from
Producen (an inBaja California
Biomedical Device Employment
dustry promotion
research
center
34,088
35,000
sponsored in part
26,419
30,000
by the Government
of Baja California),
25,000
estimated employ20,000
ment in this sector
15,000
had risen by 29% to
10,000
nearly
35,000.
5,000
Such growth is not
0
just the result of
2003
2006
State and local
economic develop-

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [5]

ment teams, but also by the industry itself, with

the formation of the Cluster de Productos Mdicos de Las Californias the Medical Products
Cluster of the Californias. This group, made up
of many of Baja Californias largest medical products manufacturers, is actively encouraging
suppliers to expand into Mexico something that,
if done correctly, can actually result in more
competitive companies and more employment on
both sides of the US-Mexico border. The secondlargest market for US medical equipment in Latin
America (after Brazil) could also become one of
the industrys largest strategic partners, as well.

Pharmaceutical & Clinical Research

As also reported in Borderless Innovation, Mexico
is one of the largest pharmaceutical markets in
the world and the largest in Latin America. With
industry sales expected to reach nearly $14 billion in 2007, nearly all major multinational
pharmaceutical companies are present, including
Merck (operating as Merck, Sharp & Dhome de
Mxico), Abbot Laboratories, Astra Zeneca, Bayer, Bristol Myers, Eli Lilly, Glaxo Smith Kline,
Roche Syntex, Novartis, Novo Nordisk, Pfizer,
Schering Plough, and Wyeth. While most of these
pharmaceutical giants are involved with manufacturing activities, many also have made
significant investments in clinical research, as
well.
There are, in addition, several hundred other
pharmaceutical manufacturing companies primarily involved with generics.
Nearly all
pharmaceutical companies are active in the national industry assocation, CANIFARMA (Cmara
Nacional de la Industria Farmacutica), which
represents the interests of two major categories
of firms: research-based pharmaceutical firms
(which are represented by a sub-group within
CANIFARMA, called the Asociacin Mexicana de
Industrias
de
Investigacin
Farmacutica
[AMIIF]), and generics manufacturers (which are
part of CANIFARMAs Asociacin Nacional de Fabricantes de Medicamentos ANAFAM).
As mentioned, most of these firms are involved
with manufacturing (concentrated in Central
Mexico and the Distrito Federal [DF]), with very
little activity in R&D. While at first glance, a
manufacturing focus might be considered a weak-

ness, it also underscores the highly developed

manufacturing expertise within Mexico, where
production is done under high-quality, GMP standards, often in FDA-registered facilities. For
companies seeking options for lower-cost, highquality, nearshore manufacturing of pharmaceuticals, Mexico can play a strategic role in
outsourced manufacturing.
Two examples highlight this evolving opportunity:
San Diego-based Diversa (covered previously in
Borderless Innovation), continues to manufacture
enzymes and proteins through a strategic venture
with FERMIC one of Latin Americas largest
pharmaceutical fermentation plants located near
Mexico City. FERMICs FDA-GMP approved facility
has a production capacity of over 1.3 million
liters, and an expansion underway that will increase that capacity to 1.9 million liters; in
addition to having an on-site R&D department to
support their own efforts to become more involved with custom manufacturing of new
biological and biotech products.
The second example demonstrates another type
of evolution: Boehringer Ingelheim a global
pharmaceutical leader announced in April 2007
that one of their two Mexico facilities will now
offer contract manufacturing and packaging services for solid, semi-solid, soft-gel and liquid
pharmaceuticals. According to company statements, not only will they be able to deliver
products at the same or lower cost compared to
India or China, they will also be able to serve the
entire North American market from this location
with existing safety certification in the US, Canada and Mexico. Notably, a tri-country strategy
might also facilitate (as well as potentially complicate) future measures to consider direct
prescription drug importation from Mexico and
throughout North America, as well.
But pharmaceutical manufacturing is only one
part of the life sciences industry in Mexico.
Pharmaceutical companies (largely members of
AMIIF) have also supported the development of
strong clinical research clusters in key metropolitan regions, including the DF (Mexico City),
Cuernavaca (Morelos), Guadalajara (Jalisco), and
Monterrey (Nuevo Len). According to AMIIF,
clinical trials undertaken by their members have
involved more than 1,250 institutions in Mexico,
more than 2,000 researchers, and over 51,000
patients (in 2005).

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [6]

These numbers are, in fact, increasing. While FDA-tracked clinical trials clearly are still concentrated
primarily in the United States, a recent study by Thomson CenterWatch notes that the Latin American
clinical research market has experienced significant growth over the past 10 years, especially during
the last five.
Why such growth? According to their 2005 survey of more than 300
investigative sites in Latin America, some key elements are cited:
large treatment-nave populations, centralized health care systems,
strong physician-patient relationships, high patient retention rates,
Western-trained investigators, and disease patterns that reflect both
developed and developing-world markets. In addition, participants in
this survey also noted that faster patient enrollment has typically led
to a lower proportion of trials delayed longer than one month
(compared to sites in the US and Europe).
As seen in the graphs at right, Mexico, in fact, while still emerging
as a global location for clinical studies, actually ranks slightly higher
in current or recently-completed studies than either India or China.
Mexico-based clinical researchers also have significant experience not
just in Phase III and IV trials, but also Phase II and an increasing number
of Phase I clinical trials. And, most speak English and are geographically closer to California companies.
Many studies are already also being conducted simultaneously in a
binational (or multinational) context: a Phase III Merck study of HIV
therapies that includes sites in San Diego and Mexico City (DF); a Phase
II study for asthma treatments by Hoffmann-La Roche in San Diego,
Monterrey, Guadalajara, and Mexico City; and a Phase III study by
Pfizer/Sanofi-Aventis for diabetes in San Diego, Mexico City and Monterrey are just three of many examples.
Such binational protocols have the potential for not just speeding a life
sciences discovery to market faster, but also could be used to leverage
a multi-regional clinical trials network that increases the skill base of
researchers as well as fosters a value-based mechanism for creating
the human and physical infrastructure necessary for supporting
Mexicos emerging life sciences industry.

FDA/NIH-Tracked Clinical Trials

(Active & Recent, May 2007)

1,729

San Diego

Brazil

560

Mexico

501

India

435

China

423
0

500

1,000

1,500

2,000

source: ClinicalTrials.gov

FDA-Tracked Clinical Trials

in Mexico - By Phase

Phase IV

11%
64%

Phase III

23%

Phase II

Phase I

Why Only Five Regions?

While this initial briefing paper does not intend to
be a comprehensive nor a definitive study of
Mexicos emerging life sciences industry, it is clear
that the five states discussed in this document
Guanajuato, Jalisco, Morelos, Nuevo Len, as well as
Baja California have some of the most-advanced
life sciences facilities as well as some of the highest
levels of human scientific capital in Mexico, as seen
in this map showing the concentrations of SNI researchers by State. Other states, including Sonora,
Tamaulipas, Colima, Yucatan and others, also have
notable research capabilities in life sciences, but
are not discussed here.

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [7]

0%

1%
25%

50%

75%

Regions of Innovation in Life Sciences

While over the coming months, more detailed briefings will be developed describing the life sciences
infrastructure and activities within each State, a few highlights about these regions of innovation are
presented below. Notably, as is the case with other technology centers throughout the world, these
regions often are rooted around higher education centers either public or private universities,
Federal laboratories, and State technology institutes.
As seen at right, all of them are substantially expanding
their overall science base and SNI-registrations. In fact,
increasing private sector interaction, new sources of funding, as well as plans by State and local governments to
foster the growth of life sciences in these regions, could
play a large role in catalyzing their development and capabilities over the coming decade. Other factors may also
play an unexpected role such as Mexicos lack of
prohibitions in stem cell research, as well as its more
flexible immigration rules (which have the potential to
foster international interactions that may be less-common
or more difficult in the US).

800 SNI-Registered Researchers

741
692

(2005 & 2007)

700

575

600
500

410

410

451

446

400
299

300

284

281

200
100
0
Baja
California

Guanajuato

Jalisco

2005

Morelos

Nuevo
Len

2007

Guanajuato
On arrival to the construction site of Mexicos new National
Genomics Laboratory for Biodiversity (LANGEBIO - Laboratorio Nacional de Genomica para la Biodiversidad), one is
struck by the contrast between the simplicity of the surrounding strawberry fields and the vision of creating one of
the worlds foremost laboratories dedicated to sequencing
plant, animal, and microbial genomes of potential use for
agricultural, medical and industrial applications. While the
CINVESTAV researcher discussing
new 100,000 square foot facility is nearing completion adjagenetic structure of maiz
cent to CINVESTAV the Center for Research and Advanced
Studies LANGEBIOs Director, Dr. Luis Herrera-Estrella (a
member of the US National Academy of Sciences), has already led a team at the Laboratory to map out
the more than 52,500 genes of maiz palomero one of the oldest species of maiz, and known to many
as pop corn.
This accomplishment, coming only two years after the
launching of LANGEBIO, is part of CINVESTAVs 25 year
history as a center for advanced biological and biotech
research. Located in Irapuato, Guanajuato, this Federally-funded center (part of the National Polytechnic
Institutes network of research facilities) is actually one
of Mexicos centers of excellence in basic and applied
research related to plant biology and agricultural biotech. Strong support from the State government and
CONACYT has allowed CINVESTAV to develop well-respected Masters and Doctorate programs in plant
biotechnology, with over 250 graduates from these
programs to-date. In addition, CINVESTAV is home to

Some Biotech Projects in Guanajuato:

Research into the production of natural
insecticides using modified hairy-rooted
plants
Biocontrols of agricultural diseases using
spores
Development of a biological process that
produces nanoparticulates of silver
Altering plants to act as bioreactors to
produce vaccines and other products

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [8]

the State government undertaking vigorous efforts to develop additional industrial and
technology parks, as well as educational and
transportation infrastructure, Guanajuato appears to be positioning itself as a future leader in
agricultural- and nutraceutical-related biotechnology.

CINVESTAV research labs host life

sciences visitors from US & Mexico

over 30 researchers specializing in biochemistry,

biotechnology, microbiology and plant biology.
While CINVESTAV and LANGEBIO are perhaps the
best known of the States 35 research centers,
just a short drive away is the Instituto Tecnolgico de Celaya (TECELAYA) one of 218
centers that make up Mexicos National System of
Technological Higher Education. TECELAYA offers a doctorate program in chemical
engineering; as well as Masters and undergraduate degrees in chemical, mechanical, industrial
and biochemical engineering. This last program
Biochemical Engineering has a staff of more
than 30 professors, a current Masters program
enrollment of nearly 40 students, and more than
500 enrolled in the bachelors program.

Jalisco
What do wastewater from tequila production and
antibiotics from frog skin have to do with life
sciences? Both are the focus of current biotechnology research underway just West of
Guanajuato in the neighboring State of Jalisco.
Better known in the US by its capital, Guadalajara, the State is one of Mexicos largest with a
population of nearly 7 million. It also is one of
Mexicos leading
locations for clin500
1,000 1,500 2,000
ical
research,
Distrito Federal
health care, and
Morelos
technology manuEstado de Mexico
facturing
Jalisco
(including elecNuevo Len
tronics,
Baja CA Sur
pharmaceuticals,
Veracruz
and software).
Guanajuato

With an orientation toward bioengineering and

molecular biotechnology, TECELAYAs researchers also have developed an orientation toward
commercial applications of their activities particularly in the food and agricultural industry. In
fact, while few patents have sprung from TECELAYA (a situation not uncommon in Mexico),
several of their innovations have already been
licensed by national and international companies
including a process using modified enzymes and
bioreactors to allow higher extraction of natural
pigment from marigolds - a process subsequently
licenced to India-based AVT Natural Products and
Chrysantis of Chicago.
Additional life sciences-related institutions are
also part of the Guanajuato cluster among them
the University of Guanajuatos Research Institute
in Experimental Biology; and INIFAP (Instituto
Nacional de Investigaciones Forestales y Agropecuarias), a National research institution with a
local center housing 60 researchers focused on
forestry, agriculture, and animal sciences. With

Yucatan

Life Sciences Researchers

Registered in SNI - By State

As seen in the
(Agricultural & Veterinary
Queretaro
Sciences, Life Sciences,
graph at right,
Michoacan
Medicine & Human
Jalisco actually
Pathology, Chemistry - 2005)
Puebla
ranks fourth in
Coahuila
the number of
Baja CA
SNI-registered researchers
that
are focused on life sciences (after the DF, Morelos, and Estado de Mxico). It is also home to
well-respected educational institutions and research centers in health, genetics, food,
environmental and animal sciences the largest
being the Universidad de Guadalajara (UdeG).
UdeGs CUCBA (Centro Universitario de Ciencias
Biolgicas y Agropecuarias) alone has more than
50 life sciences-related researchers registered
with the SNI, approximately 300 professors, and
nearly 3,000 students enrolled in undergraduate,
graduate and doctoral programs including neurobiology, molecular and cellular biology, seed
and forest science, genetic reproduction, plant
and animal biotechnology, and food science. This

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [9]

large cluster of students involved with biology has made UdeG the
natural state-level organizer for Jaliscos annual Olimpadas de
Biologa the Biology Olympics.
While much smaller in size, the CONACYT-sponsored CIATEJ
(Centro de Investigacin y Asistencia en Tecnologa y Diseo del
Estado de Jalisco) and its over 80 researchers are also part of
Jaliscos life sciences research infrastructure undertaking a variety of projects for agro-industrial and pharmaceutical companies,
while also acting as a training ground and educational center for
post-graduate students in biotechnology, food sciences, and environmental technology. Beyond education and projects, CIATEJ
researchers also generate scientific publications and patents (19
publications and 5 patent applications in 2005 alone).

Frog-Based Antibiotics?
Dr. Alfonso Islas and a small
team from UdeG love frogs
or, at least the antibiotic
properties in certain proteins that theyve isolated
and have been researching
from the skin of the American Bullfrog.
Working with both CONACYT
and Laboratorios Veterinarios (LAVET), UdeG and Dr.
Islas hope to turn this natural antibiotic into potential
animal and human application following additional
research

Guadalajara is also the home to another valuable resource: the

Biocluster del Occidente a non-profit group formed in 2005 to
enhance the competitiveness of existing pharmaceutical and biomedical companies, as well as promote the development of new
biomedical and biotech firms. Headed by Dr. Gregorio Cuevas a
scientist and entrepreneur with a doctorate in Applied Biochemistry from MIT the Biocluster has
brought together five universities (including the UdeG, ITESO, and the Universidad Autnoma de
Guadalajara), as well as CIATEJ, and some of Jaliscos major veterinary and pharmaceutical companies. The goal: to spur the growth of the life sciences industry in Jalisco and surrounding states, and
to help protect and commercialize ideas developed by regional researchers.

Hospital Civil de Guadalajara

(photo courtesy of Hospital )

No discussion about life sciences in Jalisco can go without mentioning another research asset: the Hospital
Civil de Guadalajara. The Hospital Civil is a teaching
hospital affiliated with the UdeG, providing on a daily
basis over 2,400 consultations, nearly 500 emergency
room examinations, over 15,900 laboratory tests, and
real-world learning experiences for 1,300 medical students.
The Hospital Civil has the second-largest
installed bed capacity in Latin America over its 12 floors,
drawing patients from not just Jalisco, but from surrounding states as well.

With a strong research focus, the Hospital has the only

tissue bank in western Mexico. The Hospital currently
has 20 researchers involved with 15 separate lines of study (including stem cells), and in 2006, 43
clinical trials were initiated (all were Phase II or Phase III trials with multinational sponsorship).
Despite such achievements, Hospital Civil is only just beginning to consider clinical trials a strategic
part of its activities.

Morelos
Somewhat overshadowed by the concentration of life sciences resources in adjacent Mexico City
(Distrito Federal), Morelos stands apart as the state with the second-largest number of SNI-registered
life sciences researchers (more than 300) and the second-largest number of members in Mexicos
Sociedad Mexicana de Bioqumica (Biochemistry Society - 58).

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [10]

This concentrated critical mass of human capital largely in the city of Cuernavaca, Morelos is made
up of a large number of research centers fifteen in all focused on biology, biotechnology, genomics,
and health. While the Universidad Nacional Autnoma de Mxico (UNAM) dominates Morelos life
sciences cluster, several other research centers are of note, including the Instituto Nacional de Salud
Pblica (National Institute of Public Health, one of Mexicos leading health research centers, with
specializations in diabetes, HIV, tuberculosis, and cancer, among others) and the Centro de Investigacin en Biotecnologa (Center for Biotechnology Research CEIB) at the Universidad Autnoma del
Estado de Morelos, focused on biological controls, natural products, and environmental remediation.
However, it is UNAMs Morelos campus that is the focal point for two major research centers. The
Instituto de Biotecnologa (Biotechnology Institute - IBt) is the largest, with approximately 100
researchers, nearly 250 students (graduate and post-graduate) and technicians, and over 80,000 square
feet of laboratory space. Founded in 1982 by early biotechnology pioneer, Dr. Francisco Bolivar (of
pBR322 fame), IBt has become one of Mexicos biotech centers of excellence, specializing in plant
molecular biology, biocatalysis, molecular medicine and microbiology.
UNAM-Morelos is also home to the recently founded Centro
de Ciencias Genmicas (Center for Genomic Sciences
CCG), a university research center co-founded by Dr. Rafael
Palacios (a member of the US National Academy of Sciences), and the result of a larger effort to study nitrogen-fixing
microorganisms. Notably, CCGs research staff of 35 recently announced the complete gene sequence of
Rhizobium etli a bacterium that lives symbiotically with
the common bean.

CCG Laboratory
(photo courtesy of UNAM)

While many involved with Morelos life sciences industry are

some of the countrys leading scientists, to date relatively
few examples exist of that knowledge resulting in patents or commercial products. Probiomed one
of Mexicos few domestic pharmaceutical and biotechnology companies is one of the exceptions,
establishing a strong research collaboration with the IBt that has resulted in the first domesticallycreated recombinant DNA-based pharmaceutical products in Mexico. Several other research collaborations with companies like Schering/Paion, Silanes, and Allied Domecq, are also underway at IBt.
Patents and Culture
Comparisons of global technology regions usually conclude that the low number of patents issued annually
in Mexico must indicate a lack of ability or inventiveness. While patent applications in Mexico are certainly
below what should be expected, the situation appears to be more complex than many conclude.
In fact, while world-class research is often underway in these
regions at university centers, there is little cultural emphasis at
the institutions for protecting ideas for possible future commercialization rather, peer prestige through publishing often trumps the
desire to protect innovative ideas, and legal rules for some researchers create barriers for turning ideas into commercial products.

300

Patents Granted to
Mexico-Based Inventors

250
139

200
118
141

150
148

162
121

131

120 118

132

116 112

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [11]

2006

2005

2004

2003

2002

2001

2000

1999

1998

1997

1996

1995

Proximity to the US also leads some Mexican inventors to file 100

135
applications there, avoiding Mexicos patent system entirely. While
120
118 122 107
101 104
100
50
86
patent statistics typically only show the country of the first listed
65
59
55
inventor, a review of US patent data done for this briefing shows
0
nearly an equal number of US patents have a Mexico-residing
inventor listed on the application, compared to the number of
Mex Patents Granted to Mex Inventor (1st Inventor)
patents granted each year in Mexico to Mexico-based inventors.
US Patents Granted that Include Mex Inventor (any)
With many of Mexicos creative minds employed by multinational
companies, there is also an increasing number of US corporate
patent applications that have a Mexican inventor listed on US corporate patents

Nuevo Len
They call it the International City of Knowledge otherwise known as Monterrey, Nuevo Len. This
metropolitan area is the center of a major push by the State government (in collaboration with Federal
and local officials, as well as key educational institutions) to grow beyond the traditional model of
manufactura (manufacturing production) to what they call mentefactura (mind-production).
To do this, the State is focusing its economic development and educational programs toward high-tech
industries -- among the priorities, biotechnology and medical services.
Much of their effort has been focused on schools. According to State officials, more than 32,000
children are studying under updated educational programs that stress science and innovation. In
addition, more than US$50 million in State and Federal funds has been invested in a variety of
technology projects, including the construction of a new Parque de Investigacin Innovacin
Tecnolgica (PIIT - Research and Innovation Technology Park). The PIIT built just minutes from
Monterreys airport will have six research centers and from various universities (including the
Universidad Autnoma de Nuevo Len [UANL], CINVESTAV, and ITESM-Monterrey Tec), as well as
incubator space for IT firms, and a global business center affiliated with the University of Texas.
While some evidence exists that biotech spin-offs are starting to form (particularly from long-time
industry promoters, such as Dr. Hugo Barrera a professor at UANL), universities continue to be the
focal point for life sciences activity. Largest in Nuevo Len is the UANL considered the strongest
research university in Northeast Mexico, with over 145 life sciences-related researchers alone in
Mexicos SNI registry (48 of which are in the School of Biological Sciences). While the UANL School of
Medicine offers a wide range of Doctoral and Masters degrees
in medical and biomedical research, its Biological Sciences
program has 130 professors focused on biology, food sciences,
and biotechnology. UANL also has a Centro de Incubacin de
Esmpresas y Transferencia de Tecnologa (Center for Business
Incubation and Technology Transfer - CIETT) to support the
future growth of those emerging spin-offs.
Over at Monterrey Tec (ITESM), another biotech investment
has also taken shape: a new, US$35 million Biotechnology
Center that aims to integrate the schools chemical engineerDr. Simon Goldbard visits with
ing, food, biology, and medical talent into new innovations
Dr. Mario Alvarez, Director of
and new businesses. The Center is a four story facility with
ITESMs Biotechnology Center
food safety testing labs, bioreactors, and research lab space
surrounded by undergraduate and post-graduate science classrooms. With a strong interest in connecting their capabilities to the international marketplace, the
Director of the Centro de Biotecnologa made a point during a recent visit the informational brochure
used to promote the Center was printed in only one language: English.

UANLs Hospital Universitario

Monterreys life sciences industry continues to grow, supported by its strong clinical trials capabilities. Many of these,
in fact, occur at the UANL-affiliated teaching hospital
(Hospital Universitario) and ITESMs Hospital San Jos (the two
largest centers for clinical research in Nuevo Len). With the
new Council of Specialized Medical Services (formed to promote Monterrey as a health tourism destination), additional
growth in medical services and clinical trials is likely, both at
university sites, and at a small number of start-ups (such as
Monterrey-based DeBBiOM) which will serve US firms seeking
clinical research options, as well as domestic firms facing
Mexicos new generics bioequivalency requirements.

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [12]

The Life Sciences Potential of Baja California

Just south of San Diego, one can find not only the largest concentration of biomedical device companies in
Mexico but a small but growing number of biotech researchers and entrepreneurs, as well. Highlighted
in Borderless Innovation, the Baja California biotechnology cluster is located primarily in Ensenada with its
concentration of educational and research institutions, such as the Centro de Investigacin Cientfica y de
Educacin Superior de Ensenada (CICESE), and the Universidad Autnoma de Baja California (UABC). In
fact, Ensenadas centers are themselves a reflection of historic crossborder leadership, as it was a
contingent of representatives from UNAM, CONACYT, and UABC that visited the Scripps Institute of
Oceanography in La Jolla as part of a feasibility study that led to the creation of what is now known as
CICESE in 1973.
Currently, CICESEs Doctoral and Masters degree programs in marine biology and biotechnology play a
large role in Baja Californias future biotech potential (particularly in marine biotechnology), as does
UABCs Doctoral program in agricultural biotechnology and its Masters programs in desert ecology,
veterinary sciences, and health. The Instituto Tecnolgico de Tijuana (Tijuana Technology Institute) also
has Doctoral and Masters programs in chemistry, adding further life sciences potential to a region whose
workforce is highly educated in global manufacturing and production.
While Baja California does not have the largest number of SNI-registered life sciences researchers, it does
have something few other regions in Mexico can claim interaction with and proximity to one of the largest
concentrations of biotech research and capital in the United States: San Diego.

San Diego: A Portal for Borderless Biotech?

This document is yet another part of a continuing effort to describe Mexicos evolution in technology
and science. Clearly, certain intriguing crossborder opportunities appear to exist in the case of life
sciences whether in ag-biotech, biocontrols, genomics research, pharmaceutical manufacturing,
medical devices, or clinical trials. While all of Mexico cannot expect to immediately become a
world-leader in all areas of this sector, its history already shows examples of regional genius and
connections with Californias biotech and pharmaceutical industries. The question remains: can this
history be expanded upon - and will it include San Diego?
Given that San Diego has the largest concentration of US-based biotechnology firms along the
US-Mexico border and one of the largest in the United States, there is a strong case and a unique
opportunity to work with the dynamic regions that make up Mexicos emerging life sciences industry.
Direct flights from both San Diegos or Tijuanas airports to these regions provides access that few
other locations in the United States can take advantage of. The broad use of English by many of
Mexicos technology leaders eliminates yet another barrier to increased interaction, scientific collaboration, and possibly investment. Such an opportunity, first discussed in Borderless Innovation, can
help act as a catalyst for both increasing multi-regional competitiveness in life science companies, as
well as accelerate Mexicos growth in this sector.
Just as the strength of a helix is based on the connections between
its components, so too the potential for San Diego to become both
a portal and a partner for Mexico's emerging life sciences regions
creates opportunities for each side of the crossborder region.
Joining together the talent and capabilities of San Diego, Guanajuato, Jalisco, Morelos, Nuevo Len, and Baja California in the
development of a life sciences partnership may create a unique,
international model that goes beyond borders. Ultimately, such a
partnership might also extend to many other regions in the US,
Mexico, Canada, Europe and Asia supporting new job growth, new
discoveries, and a world of borderless biotech.

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [13]

Appendix - Websites for Additional Information

Asociacin Farmacutica Mexicana

www.afmac.org.mx

Asociacin Mexicana de Industrias de Investigacin

Farmacutica

www.amiif.org.mx

Banco Nacional de Patentes (Mexico, searchable)

www.impi.gob.mx/banapanet

Cmara Nacional de la Industria Farmacutica

www.canifarma.org.mx

Centro de Biotecnologa - ITESM

www.mty.itesm.mx/dia/ing_agricola/cbt.htm

Centro de Investigacin y Asistencia en Tecnologa del

Estado de Jalisco
Centro Universitario de Ciencias Biolgicas y
Agropecuarias - UDG

www.ciatej.net.mx
www.cucba.udg.mx

CICESE Marine Biotechnology Department

biotecnologia.cicese.mx

CINVESTAV Irapuato Campus

www.ira.cinvestav.mx

CONACYT - Consejo Nacional de Ciencia y Tecnologa

www.conacyt.mx

Council on Competitiveness Mexico Projects

www.compete.org/gi/us_mexico.asp

INMEGEN Instituto Nacional de Medicina Genmica

www.inmegen.gob.mx

Instituto de Biotecnologa - UANL

www.fcb.uanl.mx/Mis_Webs/InicioIB.htm

Instituto de Biotecnologa - UNAM

www.ibt.unam.mx

Instituto de Investigaciones Oceanolgicas - UABC

iio.ens.uabc.mx

Premios a la Innovacin en Salud y Alimentacin

www.premiosinnovamex.com.mx

Secretara de Salud

www.salud.gob.mx

San Diego Dialogue

www.sandiegodialogue.org

Sociedad Mexicana de Biotechnologa y Bioingeniera

www.smbb.com.mx

This Forum Fronterizo briefing paper was developed by San Diego-based Crossborder Group Inc.
(www.CrossborderBusiness.com) under contract with UCSD Extension and San Diego Dialogue, with
the generous support of Merck. The opinions expressed in this briefing paper do not necessarily reflect
those of San Diego Dialogue; the University of California, San Diego; Merck; or Merck Sharpe & Dohme.
If you would like more information about Mexicos emerging life sciences industry, please contact UCSD
Extension-San Diego Dialogue at (858) 534-8638, or visit our website at www.SanDiegoDialogue.org; for
additional information about UCSD Extensions Global Connect program, please visit our website at
globalconnect.ucsd.edu.

Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [14]