Borderless Biotech - Mexico's Emerging Life ... - San Diego Dialogue

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
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 León. 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-à-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 Extension’s San Diego Dialogue and
Merck Sharp & Dohme (Merck) - the Life Sciences Gateway Initiative. Working with government and
life sciences leaders in some of Mexico’s most innovative regions (including the states of Guanajuato,
Jalisco, Morelos, and Nuevo León), 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 – Merck’s multi-year initiative to
promote life sciences in Mexico through research, events, and education; and San Diego Dialogue’s
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 Mexico’s emerging life sciences regions. In
fact, each of the five states that will be discussed – Guanajuato, Jalisco, Morelos, Nuevo León 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 Mexico’s Life Sciences Clusters
biotechnology
"san diego"
biotechnology
india
biotechnology
mexico
biotechnology
monterrey
biotechnology
guadalajara
biotechnology
cuernavaca
biotechnology
irapuato
"Google TM Metric" of
Selected Search Terms
2,010,000
1,300,000
133,000
74,200
48,000
15,400
Trade Trends
3,010,000
Measurement of the
total number of
returned results
using the Google TM
search engine
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.
What are these goods? The US Census Bureau defines these
Advanced Technology Products as:
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.
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 Mexico’s 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.
Biotechnology Products
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 agricultural
and human use.
What are Life Sciences?
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.
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]
US$ billions
US - Mexico Trade in
Biotechnology & Life Science Goods
(2003-2006, US$billions)
3.0
2.5
2.0
1.5
1.0
0.5
0.0
2003 2004 2005 2006
US Exports Imports

Birth Control and the “Dupont of Mexico”
Mexico’s innovations in life sciences have not been limited to the last two decades. In fact, one
of the pharmaceutical industry’s early success stories – the birth control pill – has roots in
Mexico…literally. Early steroid research in the 1930’s showed that progesterone could inhibit
ovulation in women, but commercial applications weren’t 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, Syntex’s co-founders soon hired Dr. George Rosenkranz, who envisioned building Syntex
into “the Dupont of Mexico.” Dr. Rosenkranz’s 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). Syntex’s 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 California’s 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
are nearly a five-fold increase over the last
decade (with a 17% average annual increase).
It’s also useful to consider that these numbers
do not count the significant numbers of Mexican
scientists that are graduating from doctoral programs
in the United States, Europe, and other
countries.
Annual Doctoral Graduates in Mexico
By Area of Science (1987-2005, CONACYT)
Master’s degree programs are also showing in- 50
creases that bode well for Mexico’s biotech
potential. According to CONACYT (Mexico’s
National Science and Technology Council), the
0
number of new students entering master’s de-
Agricultural Sciences Natural & Exact Sciences
gree programs in life sciences-related fields has
more than doubled since 1995, from 674 stu-
Health Sciences Engineering & Technology
dents 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.
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [4]
500
450
400
350
300
250
200
150
100
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005

The SNI & Life Sciences Publications
In addition to positive educational trends in life
sciences, Mexico’s 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.
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 Scientific’s
Essential Science Indicators, Mexico’s 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 isn’t necessarily as
strong in other areas, it does provide an independent
and global indicator of Mexico’s increasing
scientific capability.
An Update on Medical Devices and FDA
Registered Facilities
San Diego Dialogue’s 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 California’s “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, it’s 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
2,000
1,750
1,500
1,250
1,000
SNI Registered Researchers
By Area of Science
(1995-2005p, CONACYT)
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 Mexico’s
numbers increased by only 12%).
While FDA registered firms are not necessarily a
perfect indicator (it doesn’t, 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 industry
promotion
Baja California
Biomedical Device Employment
research center
34,088
sponsored in part 35,000
by the Government 30,000 26,419
of Baja California), 25,000
estimated employment
in this sector
had risen by 29% to
20,000
15,000
nearly 35,000.
10,000
Such growth is not 5,000
just the result of
0
State and local
2003 2006
economic develop-
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [5]
750
500
250
0
1995
1996
1997
1998
1999
Biology & Chemistry
Medicine & Health Sciences
Biotechnology & Agricultural Sciences
2000
2001
2002
2003
2004
2005p/

ment teams, but also by the industry itself, with
the formation of the Cluster de Productos Médicos
de Las Californias – the Medical Products
Cluster of the Californias. This group, made up
of many of Baja California’s 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 industry’s 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
México), 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 (Cámara
Nacional de la Industria Farmacéutica), 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 Asociación Mexicana de
Industrias de Investigación Farmacéutica
[AMIIF]), and generics manufacturers (which are
part of CANIFARMA’s Asociación 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 America’s largest
pharmaceutical fermentation plants located near
Mexico City. FERMIC’s 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 León). 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-naïve 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
Mexico’s emerging life sciences industry.
Why Only Five Regions?
While this initial briefing paper does not intend to
be a comprehensive nor a definitive study of
Mexico’s emerging life sciences industry, it is clear
that the five states discussed in this document –
Guanajuato, Jalisco, Morelos, Nuevo León, 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.
San Diego
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [7]
FDA/NIH-Tracked Clinical Trials
(Active & Recent, May 2007)
Brazil
Mexico
India
China
560
501
435
423
1,729
0 500 1,000 1,500 2,000
source: ClinicalTrials.gov
FDA-Tracked Clinical Trials
in Mexico - By Phase
Phase IV
Phase III
Phase II
Phase I
1%
11%
23%
64%
0% 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 Mexico’s 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).
Guanajuato
CINVESTAV researcher discussing
genetic structure of maiz
On arrival to the construction site of Mexico’s 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 world’s foremost laboratories dedicated to sequencing
plant, animal, and microbial genomes of potential use for
agricultural, medical and industrial applications. While the
new 100,000 square foot facility is nearing completion adjacent
to CINVESTAV – the Center for Research and Advanced
Studies – LANGEBIO’s 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 CINVESTAV’s 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
Institute’s network of research facilities) is actually one
of Mexico’s 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
800 SNI-Registered Researchers
700
(2005 & 2007) 692
299 284
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [8]
600
500
400
300
200
100
0
410
Baja
California
410
446
575
741
281
451
Guanajuato Jalisco Morelos Nuevo
León
2005 2007
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

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 State’s 35 research centers,
just a short drive away is the Instituto Tecnológico
de Celaya (TECELAYA) – one of 218
centers that make up Mexico’s 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 Master’s program
enrollment of nearly 40 students, and more than
500 enrolled in the bachelor’s program.
With an orientation toward bioengineering and
molecular biotechnology, TECELAYA’s 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 TECE-
LAYA (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 Guanajuato’s 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
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.
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 Mexico’s largest with a
population of nearly 7 million. It also is one of
Mexico’s leading
locations for clinical
research,
- 500 1,000 1,500 2,000
health care, and Distrito Federal
technology manu-
Morelos
facturing
Estado de Mexico
(including elec-
Jalisco
tronics,
Nuevo León
pharmaceuticals,
Baja CA Sur
and software).
Veracruz
As seen in the
graph at right,
Jalisco actually
ranks fourth in
the number of
SNI-registered researchers
that
Guanajuato
Yucatan
Queretaro
Michoacan
Puebla
Coahuila
Baja CA
are focused on life sciences (after the DF, Morelos,
and Estado de México). 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).
UdeG’s CUCBA (Centro Universitario de Ciencias
Biológicas 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]
Life Sciences Researchers
Registered in SNI - By State
(Agricultural & Veterinary
Sciences, Life Sciences,
Medicine & Human
Pathology, Chemistry - 2005)

large cluster of students involved with biology has made UdeG the
natural state-level organizer for Jalisco’s annual Olimpíadas de
Biología – the Biology Olympics.
While much smaller in size, the CONACYT-sponsored CIATEJ
(Centro de Investigación y Asistencia en Tecnología y Diseño del
Estado de Jalisco) and its over 80 researchers are also part of
Jalisco’s 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).
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 Autónoma de
Guadalajara), as well as CIATEJ, and some of Jalisco’s 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.
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
Hospital Civil de Guadalajara
(photo courtesy of Hospital )
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 Mexico’s
Sociedad Mexicana de Bioquímica (Biochemistry Society - 58).
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [10]
Frog-Based Antibiotics?
Dr. Alfonso Islas and a small
team from UdeG love frogs –
or, at least the antibiotic
properties in certain proteins
that they’ve 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…

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 Autónoma de México (UNAM) dominates Morelos’ life
sciences cluster, several other research centers are of note, including the Instituto Nacional de Salud
Pública (National Institute of Public Health, one of Mexico’s leading health research centers, with
specializations in diabetes, HIV, tuberculosis, and cancer, among others) and the Centro de Investigación
en Biotecnología (Center for Biotechnology Research – CEIB) at the Universidad Autónoma del
Estado de Morelos, focused on biological controls, natural products, and environmental remediation.
However, it is UNAM’s Morelos campus that is the focal point for two major research centers. The
Instituto de Biotecnología (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 Mexico’s 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 Genómicas (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, CCG’s research staff of 35 recently
announced the complete gene sequence of
Rhizobium etli – a bacterium that lives symbiotically with
the common bean.
While many involved with Morelos’ life sciences industry are
some of the country’s leading scientists, to date relatively
few examples exist of that knowledge resulting in patents or commercial products. Probiomed – one
of Mexico’s 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.
Proximity to the US also leads some Mexican inventors to file
applications there, avoiding Mexico’s patent system entirely. While
100
patent statistics typically only show the country of the “first listed
inventor”, a review of US patent data done for this briefing shows
nearly an equal number of US patents have a Mexico-residing
inventor listed on the application, compared to the number of
patents granted each year in Mexico to Mexico-based inventors.
With many of Mexico’s creative minds employed by multinational
companies, there is also an increasing number of US corporate
50
0
55 59 65
patent applications that have a Mexican inventor listed on US corporate patents…
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [11]
300
250
200
150
CCG Laboratory
(photo courtesy of UNAM)
Patents Granted to
Mexico-Based Inventors
148 116 112
1995
1996
1997
141
86
1998
120 118
118
139
121
162
131 132
101 104 120 135 118 122 107 100
1999
2000
2001
Mex Patents Granted to Mex Inventor (1st Inventor)
US Patents Granted that Include Mex Inventor (any)
2002
2003
2004
2005
2006

Nuevo León
They call it the “International City of Knowledge” – otherwise known as Monterrey, Nuevo León. 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 Investigación é Innovación
Tecnológica (PIIT - Research and Innovation Technology Park). The PIIT – built just minutes from
Monterrey’s airport – will have six research centers and from various universities (including the
Universidad Autónoma de Nuevo León [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 León is the UANL – considered the strongest
research university in Northeast Mexico, with over 145 life sciences-related researchers alone in
Mexico’s 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 Incubación de
Esmpresas y Transferencia de Tecnología (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 school’s chemical engineering,
food, biology, and medical talent into new innovations
and new businesses. The Center is a four story facility with
food safety testing labs, bioreactors, and research lab space
surrounded by undergraduate and post-graduate science class-
rooms. With a strong interest in connecting their capabilities to the international marketplace, the
Director of the Centro de Biotecnología made a point during a recent visit – the informational brochure
used to promote the Center was printed in only one language: English.
UANL’s Hospital Universitario
Monterrey’s 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 ITESM’s Hospital San José (the two
largest centers for clinical research in Nuevo León). 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
Mexico’s new generics bioequivalency requirements.
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [12]
Dr. Simon Goldbard visits with
Dr. Mario Alvarez, Director of
ITESM’s Biotechnology Center

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 Investigación Científica y de
Educación Superior de Ensenada (CICESE), and the Universidad Autónoma de Baja California (UABC). In
fact, Ensenada’s 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, CICESE’s Doctoral and Master’s degree programs in marine biology and biotechnology play a
large role in Baja California’s future biotech potential (particularly in marine biotechnology), as does
UABC’s Doctoral program in agricultural biotechnology and its Master’s programs in desert ecology,
veterinary sciences, and health. The Instituto Tecnológico 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 Mexico’s 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 California’s 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 Mexico’s emerging life sciences industry.
Direct flights from both San Diego’s or Tijuana’s 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
Mexico’s 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 Mexico’s 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 León, 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
Asociación Farmacéutica Mexicana www.afmac.org.mx
Asociación Mexicana de Industrias de Investigación
Farmacéutica
www.amiif.org.mx
Banco Nacional de Patentes (Mexico, searchable) www.impi.gob.mx/banapanet
Cámara Nacional de la Industria Farmacéutica www.canifarma.org.mx
Centro de Biotecnología - ITESM www.mty.itesm.mx/dia/ing_agricola/cbt.htm
Centro de Investigación y Asistencia en Tecnología del
Estado de Jalisco
www.ciatej.net.mx
Centro Universitario de Ciencias Biológicas y
Agropecuarias - UDG
www.cucba.udg.mx
CICESE – Marine Biotechnology Department biotecnologia.cicese.mx
CINVESTAV – Irapuato Campus www.ira.cinvestav.mx
CONACYT - Consejo Nacional de Ciencia y Tecnología www.conacyt.mx
Council on Competitiveness – Mexico Projects www.compete.org/gi/us_mexico.asp
INMEGEN – Instituto Nacional de Medicina Genómica www.inmegen.gob.mx
Instituto de Biotecnología - UANL www.fcb.uanl.mx/Mis_Webs/InicioIB.htm
Instituto de Biotecnología - UNAM www.ibt.unam.mx
Instituto de Investigaciones Oceanológicas - UABC iio.ens.uabc.mx
Premios a la Innovación en Salud y Alimentación www.premiosinnovamex.com.mx
Secretaría de Salud www.salud.gob.mx
San Diego Dialogue www.sandiegodialogue.org
Sociedad Mexicana de Biotechnología y Bioingeniería 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 Mexico’s 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 Extension’s Global Connect program, please visit our website at
globalconnect.ucsd.edu.
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [14]