HOUSTON Strong market demand could result in the formation of 50 new US biotechnology firms annually. And Houston business and science leaders hope many of these firms will choose to set up in their city. But "What's missing here is the tracking of technology development and bringing it to a reality where it's a commercial product, according to Paul Frison, chief executive of the Houston Technology Center.

Will the recently announced $633 million, 64-acre Southeast Texas Biotechnology Park (STBP) remedy this deficiency? Certainly, the hope is that it will enable Houston to become a centre of biomedical research and product development, and an incubator for start-up biotechnology companies. The planned STBP will be located next to the Texas Medical Center in Houston, will take 20 years to complete and eventually employ 15,000 people working in 15 buildings. Strong biotechnology activity has already made laboratory space scarce in Houston. David Nance, chief executive of Introgen Therapeutics notes that lab space demand has been outstripping supply at Texas Medical Center where his company has built research facilities. "Had the park been available to Introgen a year and a half ago, we would have built our six-acre facility on that site."

STBP will allow Houston to capitalise on being the site of the world's largest medical center. Proximity between the researchers and biotechnology developers in the park and Texas Medical Center could promote the translation of research discoveries into commercial products. Construction of the first building, the University of Texas M.D. Anderson Cancer Center's four-storey, $35 million life-sciences center will begin later this year according to its president, John Mendelsohn, a keen promoter of the STBP.

The 11 institutional members of STBP include University of Texas M.D. Anderson Cancer Center, NASA's Johnson Space Center, Baylor College of Medicine, every major hospital at Texas Medical Center and virtually every major state-funded university in Houston. Also behind the plan are the Houston Minority Business Council, Houston Technology Center and Greater Houston Partnership. Area leaders discussed creating a biotechnology industry for at least 15 years but it wasn't until the 1996 arrival of Mendelsohn that the idea gained momentum. Mendelsohn came from the University of California at San Diego, which played a big part in developing biotechnology businesses there. He began working with Frison to develop a plan in which "researchers could reap the commercial rewards of their discoveries and prompt start-ups of new companies as well."

With the help of state and private funds, the STBP group hopes Houston can rival Boston, San Diego and North Carolina in nurturing biotechnology businesses. Although funding for the Houston project appears ample, it is difficult to compare start-up funding levels to those of established biotechnology centres, which were mostly founded in the mid-to-late 1980s. A recent US standard of comparison is the 1995 University of Maryland Biotechnology Institute Center for Marine Biotechnology, which cost $160 million.

The city of Houston, other area governmental units and the Texas Medical Center have already pledged $45 million for roads, drainage and transportation improvements. Project proponent Texas Senate Finance Chairman Rodney Ellis, who chairs the Senate's powerful budget committee, faces what he calls the daunting task of persuading lawmakers to fund an additional $20 million in state infrastructure improvements for the project.

The University of Texas Board of Regents, concerned that Texas could lose out on the burgeoning biotechnology industry, has already asked the state for $24.1 million for biomedical and biotechnical research. Last week 60 biotechnology executives from around the state visited Austin, the state capital, to discuss the project with lawmakers as part of Life Science Week, said Tom Kowalski, executive director of Texas Healthcare and Biosciences Institute in Austin.

Will money be available to fund the research necessary to develop a strong biotechnology industry in the state? Houston's Texas Medical Center already has the nation's second-largest medical research budget, $1.5 billion annually (Boston's is the largest at $1.6 billion). Federal funding of biotechnology research at Texas universities and medical centres totalled $104,066,448 in 1997. Yet, these funds have not led to commercial biotechnology at the same rate as in cities such as Boston, San Diego and San Francisco.

One reason for this is that many Houston start-up biotechnology companies had to go to Boston or California to find investors, who often required the start-up companies to move to those areas. David Nance notes ample venture capital is now available for new biotechnology companies in Texas. "Perhaps for that reason it's a good time to build the park," he said. Houston venture capital firms such as Murphree Venture Partners, Sternhill Partners and Cogene BioTech Ventures have become significant players in the biotechnology industry, while veteran firm Essex Woodlands Health Ventures has been investing more money in Houston in companies such as Zonagen and Aronex Pharmaceuticals.

Texas has 27 biotech venture capital firms and now ranks number four among the states. Biotech powerhouses California (the San Diego area and Stanford University), Massachusetts (the Boston area) and North Carolina (Research Triangle Park) boast 143, 57 and 16, respectively, whereas New York State has 77 biotech venture capital firms. Maryland, home of the Route 270 biotech corridor between Baltimore and Washington, DC has eight venture capital firms. Recent initial public stock offerings by Houston biotech companies Tanox and Lexicon Genetics also will draw more talent and money to Houston, said Christine Powaser, chief financial officer of BCM Technologies, the technology transfer organisation for Baylor College of Medicine.

Investment funding will bring qualified, experienced managers to Houston according to Jacqueline Northcut, a partner with the consulting firm Accenture (formerly Arthur Andersen) in Houston who works closely with the biotech industry. For example, Drew Taylor, chief executive of start-up Bacterial BarCodes came to Houston last year from Colorado after working for major drug companies. (His year-old company licenses bacterial identification technology developed by the Baylor College of Medicine.) He said that when experienced managers realise the scope of Houston's efforts, "they will come like moths to a flame."

So the challenges of obtaining research funding, venture capital and experienced biotechnology managers all seem to be surmountable. The final ingredient for success is a sufficient number of creative researchers. Texas Medical Center already boasts many first-rate life sciences researchers in its 41 institutions. Increased research funding should lead to an increase in the number of researchers but it remains to be seen how successful Houston institutions will be in recruiting these researchers in competition with established biotechnology centres. Quality of life and cost of living issues could lead young researchers to favour Houston over existing biotechnology centres. Texas offers the financial attraction of not having a state income tax, and housing costs are low for a major city.

Another challenge for STBP may be competition with Texas cities such as Austin, San Antonio and Dallas–Fort Worth that have their own biotechnology ambitions.

The STBP is a 20-year project but we won't have to wait that long to see if it can fulfil the ambitions of its founders.