Report developed by Crossborder Group for UCSD Extension and Merck on the growth of life sciences infrastructure -- both human and physical -- in four regions of Mexico: Guanajuato, Jalisco, Morelos and Nuevo León. The research for this project included site visits, interviews, and a range of data collection, looking at education, medical device manufacturing trends, pharmaceutical research, clinical trials, and advances that these regions in Mexico are making. Also touched on in this document is the potential for crossborder life sciences collaboration, particularly in the regions of San Diego and Baja California. This report was a follow up to the more-comprehensive regional technology study, Borderless Innovation (2006) -- also developed for UCSD Extension.

1. Borderless Biotech
& Mexico’s 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 -- []

2. 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 Re-
gion, Borderless Innovation, a relationship was established
with the global pharmaceutical company, Merck and its subsid-
iary, 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 be-
tween 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 docu-
ment 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 communi-
ties 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 market-
ing 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]

3. 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 multi-
billion dollar company.
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [2]

4. Trends in Mexico’s Life Sciences Clusters
"GoogleTM Metric" of In most discussions about the global life sciences industry, Mexico
Selected Search Terms is not usually considered a prime location for innovations and high
technology. This lack of general awareness, in fact, can be
biotechnology
demonstrated with a simple metric comparing the number of
3,010,000
"san diego" “hits” certain phrases receive on the internet using the search
biotechnology engine Google™.
2,010,000
india
biotechnology 1,300,000 As seen at left, when combining the word “biotechnology” with
mexico
various phrases, such as “San Diego”, “Mexico”, “Guadalajara”,
biotechnology
monterrey
133,000 Measurement of the etc., relatively few English-language pages apparently exist that
total number of reference some of Mexico’s biotech regions. While admittedly life
biotechnology 74,200 returned results
guadalajara using the Google
TM
sciences-related activities are still an emerging part of the econo-
biotechnology 48,000
search engine my, and this Google™ metric is far from a perfect measurement of
cuernavaca the actual situation, it does provide at least an indication of the
biotechnology 15,400 perceived degree of biotechnology activity (and perhaps perceived
irapuato capability) in Mexico. That said, other indicators show more
positive signs.
US - Mexico Trade in
Biotechnology & Life Science Goods
(2003-2006, US$billions)
Trade Trends
3.0
According to the latest data from the US Department of
Commerce, trade between the US and Mexico in biotech- 2.5
nology and life sciences goods is on the increase. In 2006,
US$ billions
2.0
trade in these goods had reached nearly $3 billion in total
trade, and had an average annual growth of 15% between 1.5
2003 and 2006. 1.0
What are these goods? The US Census Bureau defines these 0.5
Advanced Technology Products as:
0.0
2003 2004 2005 2006
Biotechnology Products
Focuses on medical and industrial applications of ad- US Exports Imports
vanced scientific discoveries in genetics to
the creation of new drugs, hormones and
other therapeutic items for both agricul-
tural and human use. What are Life Sciences?
Life Sciences Products To use the definition outlined in the highly-acclaimed
Concentrates on the application of scien- 2005 study by the Council on Competitiveness and
Global Bioeconomy Consulting, “Catalyzing Cross-Bor-
tific advances (other than biological) to
der Innovation: The Mexican Life Sciences Initiative”,
medical science. Recent advances, such as
life sciences are:
nuclear resonance imaging, echocardiogra-
phy, and novel chemistry, coupled with “...broadly defined to include all biological technolo-
new production techniques for the manu- gies and applications. This includes: biotechnology,
facture of drugs have led to many new pharmaceuticals, plant and animal technologies, med-
products for the control or eradication of ical devices, healthcare (e.g. translational research,
disease. clinical trials), biological related information technol-
ogy (e.g. bioinformatics, telemedicine), as well as
biological-related production and manufacturing.”
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [3]

5. 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 500 Annual Doctoral Graduates in Mexico
450 By Area of Science (1987-2005, CONACYT)
decade (with a 17% average annual increase).
400
It’s also useful to consider that these numbers
350
do not count the significant numbers of Mexican 300
scientists that are graduating from doctoral pro- 250
grams in the United States, Europe, and other 200
countries. 150
100
Master’s degree programs are also showing in- 50
creases that bode well for Mexico’s biotech 0
1987
1989
1991
1993
1995
1997
1999
2001
2003
2005
potential. According to CONACYT (Mexico’s
National Science and Technology Council), the
Agricultural Sciences Natural & Exact Sciences
number of new students entering master’s de-
Health Sciences Engineering & Technology
gree programs in life sciences-related fields has
more than doubled since 1995, from 674 stu-
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]

6. The SNI & Life Sciences Publications 2,000 SNI Registered Researchers
By Area of Science
In addition to positive educational trends in life 1,750 (1995-2005p, CONACYT)
sciences, Mexico’s National Researcher System 1,500
also shows some interesting trends. The SNI (to
use its Spanish acronym) is a voluntary but 1,250
screened registry of accomplished researchers in 1,000
Mexico. As seen at right, between 1995 and
750
2005, the number of researchers registered in
health, biotechnology, and agricultural science- 500
related activities nearly doubled. Biology & Chemistry
250 Medicine & Health Sciences
Biotechnology & Agricultural Sciences
Over the last decade, the number of scientific 0
2005p/
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
publications that Mexico is generating in life
sciences-related fields has also more than dou-
bled in some notable areas, including chemistry,
pharmacology, immunology, microbiology, and by 156% to over 2,600 companies. During this
plant and animal sciences. These last two areas, same time, China also surpassed Taiwan as having
in fact, appear to have relatively high global the largest number of foreign firms registered,
strengths – according to Thomson Scientific’s Korea (with a 93% increase in number of firms)
Essential Science Indicators, Mexico’s microbio- leaped over Canada and the UK, and the number
logical publications are cited 39% higher than the of registered firms from Mexico fell behind the
world average, and plant & animal science publi- number of firms from India and Israel (the number
cations are cited 42% higher than average. While of FDA registered firms in these latter two countries
this relative rating of citations isn’t necessarily as growing by 73% and 47% respectively, while Mexico’s
strong in other areas, it does provide an indepen- numbers increased by only 12%).
dent and global indicator of Mexico’s increasing
scientific capability. While FDA registered firms are not necessarily a
perfect indicator (it doesn’t, for instance, neces-
sarily reflect employment or actual amounts of
An Update on Medical Devices and FDA goods traded), it does underscore the fast-moving
Registered Facilities shifts that can occur in an increasingly skilled
global workforce. One state within Mexico that is
San Diego Dialogue’s 2006 publication, Borderless taking advantage of this opportunity is actually
Innovation, described biomedical devices – one right next door: Baja California.
component of the life sciences industry – as a
“ready opportunity for regional economic devel- In 2003, Baja California biomedical device firms
opment efforts”, particularly in light of San employed just over 23,700 individuals. Based on
Diego-Baja California’s “largely untapped oppor- 2006 data from
tunity to become one of the major hubs of Producen (an in- Baja California
biomedical device design, manufacturing, and dustry promotion Biomedical Device Employment
global marketing in the world.” While that still research center 34,088
holds true from a regional perspective, such a sponsored in part 35,000
vision might also hold true for a California-Mexico by the Government 30,000 26,419
strategic relationship as well, particularly given of Baja California), 25,000
the high concentration of biomedical device com- estimated employ- 20,000
panies in Southern California. ment in this sector 15,000
had risen by 29% to
10,000
Looking at the global expansion of medical device nearly 35,000.
5,000
manufacturing, it’s also an opportunity that both Such growth is not
countries are at risk of losing: between 2003 and just the result of 0
2003 2006
2007, the number of China-based medical device State and local
manufacturers registered with the FDA increased economic develop-
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [5]

7. ment teams, but also by the industry itself, with ness, it also underscores the highly developed
the formation of the Cluster de Productos Médi- manufacturing expertise within Mexico, where
cos de Las Californias – the Medical Products production is done under high-quality, GMP stan-
Cluster of the Californias. This group, made up dards, often in FDA-registered facilities. For
of many of Baja California’s largest medical prod- companies seeking options for lower-cost, high-
ucts manufacturers, is actively encouraging quality, nearshore manufacturing of pharmaceu-
suppliers to expand into Mexico – something that, ticals, Mexico can play a strategic role in
if done correctly, can actually result in more outsourced manufacturing.
competitive companies and more employment on
both sides of the US-Mexico border. The second- Two examples highlight this evolving opportunity:
largest market for US medical equipment in Latin San Diego-based Diversa (covered previously in
America (after Brazil) could also become one of Borderless Innovation), continues to manufacture
the industry’s largest strategic partners, as well. enzymes and proteins through a strategic venture
with FERMIC – one of Latin America’s largest
pharmaceutical fermentation plants located near
Pharmaceutical & Clinical Research Mexico City. FERMIC’s FDA-GMP approved facility
has a production capacity of over 1.3 million
As also reported in Borderless Innovation, Mexico liters, and an expansion underway that will in-
is one of the largest pharmaceutical markets in crease that capacity to 1.9 million liters; in
the world and the largest in Latin America. With addition to having an on-site R&D department to
industry sales expected to reach nearly $14 bil- support their own efforts to become more in-
lion in 2007, nearly all major multinational volved with custom manufacturing of new
pharmaceutical companies are present, including biological and biotech products.
Merck (operating as Merck, Sharp & Dhome de
The second example demonstrates another type
México), Abbot Laboratories, Astra Zeneca, Bay-
of evolution: Boehringer Ingelheim – a global
er, Bristol Myers, Eli Lilly, Glaxo Smith Kline,
pharmaceutical leader – announced in April 2007
Roche Syntex, Novartis, Novo Nordisk, Pfizer,
that one of their two Mexico facilities will now
Schering Plough, and Wyeth. While most of these
offer contract manufacturing and packaging ser-
pharmaceutical giants are involved with manu-
vices for solid, semi-solid, soft-gel and liquid
facturing activities, many also have made
pharmaceuticals. According to company state-
significant investments in clinical research, as
ments, not only will they be able to deliver
well.
products at the same or lower cost compared to
India or China, they will also be able to serve the
There are, in addition, several hundred other
entire North American market from this location
pharmaceutical manufacturing companies pri-
with existing safety certification in the US, Can-
marily involved with generics. Nearly all
ada and Mexico. Notably, a tri-country strategy
pharmaceutical companies are active in the na-
might also facilitate (as well as potentially com-
tional industry assocation, CANIFARMA (Cámara
plicate) future measures to consider direct
Nacional de la Industria Farmacéutica), which
prescription drug importation from Mexico and
represents the interests of two major categories
throughout North America, as well.
of firms: research-based pharmaceutical firms
(which are represented by a sub-group within But pharmaceutical manufacturing is only one
CANIFARMA, called the Asociación Mexicana de part of the life sciences industry in Mexico.
Industrias de Investigación Farmacéutica Pharmaceutical companies (largely members of
[AMIIF]), and generics manufacturers (which are AMIIF) have also supported the development of
part of CANIFARMA’s Asociación Nacional de Fab- strong clinical research clusters in key metropoli-
ricantes de Medicamentos – ANAFAM). tan regions, including the DF (Mexico City),
Cuernavaca (Morelos), Guadalajara (Jalisco), and
As mentioned, most of these firms are involved Monterrey (Nuevo León). According to AMIIF,
with manufacturing (concentrated in Central clinical trials undertaken by their members have
Mexico and the Distrito Federal [DF]), with very involved more than 1,250 institutions in Mexico,
little activity in R&D. While at first glance, a more than 2,000 researchers, and over 51,000
manufacturing focus might be considered a weak- patients (in 2005).
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [6]

8. 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.”
FDA/NIH-Tracked Clinical Trials
Why such growth? According to their 2005 survey of more than 300 (Active & Recent, May 2007)
investigative sites in Latin America, some key elements are cited:
large treatment-naïve populations, centralized health care systems, San Diego 1,729
strong physician-patient relationships, high patient retention rates,
Western-trained investigators, and disease patterns that reflect both Brazil 560
developed and developing-world markets. In addition, participants in
this survey also noted that faster patient enrollment has typically led Mexico 501
to a lower proportion of trials delayed longer than one month
435
(compared to sites in the US and Europe). India
China 423
As seen in the graphs at right, Mexico, in fact, while still “emerging”
as a global location for clinical studies, actually ranks slightly higher 0 500 1,000 1,500 2,000
in current or recently-completed studies than either India or China.
Mexico-based clinical researchers also have significant experience not source: ClinicalTrials.gov
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 geographi- FDA-Tracked Clinical Trials
cally closer to California companies. in Mexico - By Phase
Many studies are already also being conducted simultaneously in a
binational (or multinational) context: a Phase III Merck study of HIV Phase IV
11%
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, Phase III 64%
Monterrey, Guadalajara, and Mexico City; and a Phase III study by
Pfizer/Sanofi-Aventis for diabetes in San Diego, Mexico City and Mon- 23%
Phase II
terrey are just three of many examples.
Such binational protocols have the potential for not just speeding a life 1%
Phase I
sciences discovery to market faster, but also could be used to leverage
a multi-regional clinical trials network that increases the skill base of 0% 25% 50% 75%
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 re-
searchers 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]

9. 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 800 SNI-Registered Researchers 741
(2005 & 2007) 692
their overall science base and SNI-registrations. In fact, 700
increasing private sector interaction, new sources of fund- 600 575
ing, as well as plans by State and local governments to 500
410 410
446 451
foster the growth of life sciences in these regions, could 400
299
play a large role in catalyzing their development and capa- 300
284 281
bilities over the coming decade. Other factors may also 200
play an unexpected role – such as Mexico’s lack of 100
prohibitions in stem cell research, as well as its more 0
flexible immigration rules (which have the potential to Baja Guanajuato Jalisco Morelos Nuevo
California León
foster international interactions that may be less-common
or more difficult in the US). 2005 2007
Guanajuato
On arrival to the construction site of Mexico’s new National
Genomics Laboratory for Biodiversity (LANGEBIO - Laborato-
rio Nacional de Genomica para la Biodiversidad), one is
struck by the contrast between the simplicity of the sur-
rounding 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
CINVESTAV researcher discussing new 100,000 square foot facility is nearing completion adja-
genetic structure of maiz cent 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 Some Biotech Projects in Guanajuato:
launching of LANGEBIO, is part of CINVESTAV’s 25 year
history as a center for advanced biological and biotech Research into the production of natural
research. Located in Irapuato, Guanajuato, this Feder- insecticides using modified hairy-rooted
ally-funded center (part of the National Polytechnic plants
Institute’s network of research facilities) is actually one
of Mexico’s centers of excellence in basic and applied Biocontrols of agricultural diseases using
research related to plant biology and agricultural bio- spores
tech. Strong support from the State government and
Development of a biological process that
CONACYT has allowed CINVESTAV to develop well-re- produces nanoparticulates of silver
spected Masters and Doctorate programs in plant
biotechnology, with over 250 graduates from these Altering plants to act as bioreactors to
programs to-date. In addition, CINVESTAV is home to produce vaccines and other products
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [8]

10. the State government undertaking vigorous ef-
forts to develop additional industrial and
technology parks, as well as educational and
transportation infrastructure, Guanajuato ap-
pears to be positioning itself as a future leader in
agricultural- and nutraceutical-related biotech-
nology.
CINVESTAV research labs host life Jalisco
sciences visitors from US & Mexico
What do wastewater from tequila production and
antibiotics from frog skin have to do with life
over 30 researchers specializing in biochemistry, sciences? Both are the focus of current biotech-
biotechnology, microbiology and plant biology. nology research underway just West of
While CINVESTAV and LANGEBIO are perhaps the Guanajuato – in the neighboring State of Jalisco.
best known of the State’s 35 research centers, Better known in the US by its capital, Guadalaja-
just a short drive away is the Instituto Tec- ra, the State is one of Mexico’s largest with a
nológico de Celaya (TECELAYA) – one of 218 population of nearly 7 million. It also is one of
centers that make up Mexico’s National System of Mexico’s leading
Technological Higher Education. TECELAYA of- locations for clin-
fers a doctorate program in chemical ical research, - 500 1,000 1,500 2,000
engineering; as well as Masters and undergradu- health care, and Distrito Federal
ate degrees in chemical, mechanical, industrial technology manu- Morelos
and biochemical engineering. This last program – facturing Estado de Mexico
Biochemical Engineering – has a staff of more (including elec- Jalisco
than 30 professors, a current Master’s program tronics, Nuevo León
Baja CA Sur
enrollment of nearly 40 students, and more than pharmaceuticals,
Veracruz
500 enrolled in the bachelor’s program. and software).
Guanajuato
Life Sciences Researchers
Yucatan Registered in SNI - By State
With an orientation toward bioengineering and As seen in the (Agricultural & Veterinary
Queretaro
molecular biotechnology, TECELAYA’s research- graph at right, Sciences, Life Sciences,
Michoacan Medicine & Human
ers also have developed an orientation toward Jalisco actually Puebla
Pathology, Chemistry - 2005)
commercial applications of their activities – par- ranks fourth in Coahuila
ticularly in the food and agricultural industry. In the number of Baja CA
fact, while few patents have sprung from TECE- SNI-registered re-
LAYA (a situation not uncommon in Mexico), searchers that
several of their innovations have already been are focused on life sciences (after the DF, More-
licensed by national and international companies los, and Estado de México). It is also home to
– including a process using modified enzymes and well-respected educational institutions and re-
bioreactors to allow higher extraction of natural search centers in health, genetics, food,
pigment from marigolds - a process subsequently environmental and animal sciences – the largest
licenced to India-based AVT Natural Products and being the Universidad de Guadalajara (UdeG).
Chrysantis of Chicago.
UdeG’s CUCBA (Centro Universitario de Ciencias
Additional life sciences-related institutions are Biológicas y Agropecuarias) alone has more than
also part of the Guanajuato cluster – among them 50 life sciences-related researchers registered
the University of Guanajuato’s Research Institute with the SNI, approximately 300 professors, and
in Experimental Biology; and INIFAP (Instituto nearly 3,000 students enrolled in undergraduate,
Nacional de Investigaciones Forestales y Agropec- graduate and doctoral programs – including neu-
uarias), a National research institution with a robiology, molecular and cellular biology, seed
local center housing 60 researchers focused on and forest science, genetic reproduction, plant
forestry, agriculture, and animal sciences. With and animal biotechnology, and food science. This
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [9]

11. large cluster of students involved with biology has made UdeG the
natural state-level organizer for Jalisco’s annual Olimpíadas de Frog-Based Antibiotics?
Biología – the Biology Olympics. Dr. Alfonso Islas and a small
team from UdeG love frogs –
While much smaller in size, the CONACYT-sponsored CIATEJ or, at least the antibiotic
(Centro de Investigación y Asistencia en Tecnología y Diseño del properties in certain pro-
Estado de Jalisco) and its over 80 researchers are also part of teins that they’ve isolated
Jalisco’s life sciences research infrastructure – undertaking a vari- and have been researching
ety of projects for agro-industrial and pharmaceutical companies, from the skin of the Ameri-
can Bullfrog.
while also acting as a training ground and educational center for
post-graduate students in biotechnology, food sciences, and envi- Working with both CONACYT
ronmental technology. Beyond education and projects, CIATEJ and Laboratorios Veterinar-
researchers also generate scientific publications and patents (19 ios (LAVET), UdeG and Dr.
publications and 5 patent applications in 2005 alone). Islas hope to turn this natu-
ral antibiotic into potential
Guadalajara is also the home to another valuable resource: the animal and human applica-
Biocluster del Occidente – a non-profit group formed in 2005 to tion following additional
enhance the competitiveness of existing pharmaceutical and bio- research…
medical 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 compa-
nies. 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 with-
out 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 stu-
dents. 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 sur-
rounding states as well.
Hospital Civil de Guadalajara
(photo courtesy of Hospital )
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 Mexico’s
Sociedad Mexicana de Bioquímica (Biochemistry Society - 58).
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [10]

12. 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 Investi-
gación 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 CCG Laboratory
de Ciencias Genómicas (Center for Genomic Sciences – (photo courtesy of UNAM)
CCG), a university research center co-founded by Dr. Rafael
Palacios (a member of the US National Academy of Scienc-
es), and the result of a larger effort to study nitrogen-fixing
microorganisms. Notably, CCG’s research staff of 35 re-
cently 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 domestically-
created recombinant DNA-based pharmaceutical products in Mexico. Several other research collabora-
tions 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 300
Patents Granted to
regions at university centers, there is little “cultural” emphasis at Mexico-Based Inventors
the institutions for protecting ideas for possible future commercial- 250
ization – rather, peer prestige through publishing often trumps the 139 162
200
desire to protect innovative ideas, and legal rules for some re- 118 121 131
120 118 132
searchers create barriers for turning ideas into commercial products. 150
141
148
116 112
Proximity to the US also leads some Mexican inventors to file 100
applications there, avoiding Mexico’s patent system entirely. While 120
135
118 122 107
50 101 104 100
patent statistics typically only show the country of the “first listed 55 59 65
86
inventor”, a review of US patent data done for this briefing shows 0
1999
2001
2003
2005
1995
1996
1997
1998
2000
2002
2004
2006
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 Mexico’s 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…
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [11]

13. 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
Empresas 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 engineer-
Dr. 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 ITESM’s Biotechnology Center
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.
Monterrey’s life sciences industry continues to grow, sup-
ported 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 pro-
mote 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
UANL’s Hospital Universitario clinical research options, as well as domestic firms facing
Mexico’s new generics bioequivalency requirements.
Borderless Biotech & Mexico's Emerging Life Sciences Industry -- [12]

14. 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 collab-
oration, 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, Guana-
juato, 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]

15. Appendix - Websites for Additional Information
Asociación Farmacéutica Mexicana www.afmac.org.mx
Asociación Mexicana de Industrias de Investigación
www.amiif.org.mx
Farmacéutica
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
www.ciatej.net.mx
Estado de Jalisco
Centro Universitario de Ciencias Biológicas y
www.cucba.udg.mx
Agropecuarias - UDG
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]