S o u t h

D a k o t a

Biosc ience industry

Governors Message
n South Dakota, youll find opportunities that dont exist anywhere else. Collaboration and research go hand-in-hand. We have a business climate that simply cant be beat and top-notch bioscience companies such as hematech, Nutraferma, and 3M already call South Dakota home. For the past few years, we have been carving our niche in the bioscience world. Some of the projects have brought national and international attention to our state, and here is why: We create opportunities. South Dakota is turning a closed gold mine into a national underground science lab. at 4,850 feet below the earths surface, scientists and researchers are already studying neutrinos, antimatter and other wonders of the universe. We search for answers. a local philanthropist, t. Denny Sanford, made a $400 million investment in biomedical research in South Dakota with several goals, including the ambitious mission of seeking a cure for type 1 diabetes. We support our researchers. the State of South Dakota has invested $30 million since 2004 and created 10 research centers. We are the only state in the nation where our companies dont pay taxes on personal property, corporate income, personal income, inheritance or business inventories. Please take some time and consider South Dakotas excellent business climate. If you would like more information on doing business in South Dakota, call the Governors office of Economic Development at 1-800-872-6190 or visit our website at www.SDreadytowork.com Sincerely,

Dennis Daugaard

Content

Welcome | Contents

1 | Bioscience industry overview 1 | 5 | 9 | Making the initiative Private research initiatives Bioscience By the nuMBers

13 | ag Processing & research 15 | Medical devices & equiPMent 17 | research & develoPMent 19 | research incuBators & Parks 19 | 24 | 25 | 26 | 27 | 27 | 28 | 29 | 32 | research incuBators research Parks regulation Business costs Business cliMate taxes tax aBateMents & refunds finance PrograMs angel investors & venture caPital

25 | incentives

Bioscience Industry overview

MakIng the InItIatIve
South Dakota committed to growing the bioscience industry within its borders in 2003 with the unveiling of the 2010 Research Initiative. Since then, the State of South Dakota has allocated more than $200 million toward R&D efforts. In fact, recent funding of R&D efforts in South Dakota are now outpacing the nation: From 2003 to 2008 South Dakota ranked 2nd in the nation for an increase of IndustryFinanced R&D Expenditures at Colleges and universities (265.31% increase). From 2003 to 2008, South Dakota ranked 1st in the nation for an increase of academic R&D Expenditures (83.68% increase).

achievements of the 2010 Research Initiative include: Research Grant Program Research Centers Business Plan Competition New PhD Programs Research Facility and Park Developments and upgrades National Research Network Connection

Research grant Program

Since July 2005, South Dakota has invested $4 million in Competitive Research Seed Grants to support researchers at South Dakota public universities. the awards are intended to help support faculty researchers: Develop research programs in their departments Become more competitive for external grants and contracts Develop ideas with commercial potential

Bioscience Industry Overview

South Dakota Research Centers

In 2004, the State of South Dakota began funding nationally competitive research centers of excellence focused on discoveries with commercial potential and collaboration with industry partners. to date the state has committed to invest $30 million in 10 research centers. the 2010 Research Centers have generated additional private and federal funding totaling $138 million dollars. In total, these centers have received more than $174 million in R&D support and have had an economic impact of more than $251 million on the state of South Dakota. the South Dakota research centers are:

ReSeaRCh CenteRS South Dakota Signal transduction Center

Examines pathways regulating cell growth and function for development of new methods to prevent, diagnose, and treat cardiovascular disease and cancer.

Center for Infectious Disease Research & vaccinology

Developing novel therapeutic and diagnostic technologies for infectious disease in humans and domestic animals.

Center for the Research & Development of Light-activated Materials

harnessing the energy of light and transforming it into new chemical bonds, signal, electricity, and ultra thin films.

Center for Bioprocessing Research & Development

Developing innovative processes to convert biomass into ethanol and high value chemicals.

Center of excellence for Drought tolerance Biotechnology

Development of drought and temperature tolerant crops.

national Center for the Protection of the Financial Infrastructure

advancing the security and safety of the nations infrastructure through research, education, and outreach.

Center for Detecting Rare Physics Processes with Ultra-Low Background experiments at Sanford Lab/DUSeL
Supporting and enabling physics research at the Sanford Laboratory and Deep underground Science and Engineering Laboratory at homestake.

translational Cancer Research Center

translational cancer research focusing on underserved rural and Native american populations.

Center for Biological Control and analysis of applied Photonics

Research, support, and dissemination of medically useful drugs, therapies, and technologies based on the application of applied photonics at the molecular level.

Repair, Refurbish, and Return to Service applied Research Center

Repairing, refurbishing, and extending the useful life of Dept. of Defense and private sector equipment using innovative material processing methods.

Bioscience Industry overview

giant vision Business Plan Competition
the Governors Giant Vision Business Plan Competition began in 2005 and is organized and hosted by the South Dakota Chamber of Commerce and Industry and the Governors office of Economic Development (www.southdakotagiantvision.com). the competition involves two contests: one geared toward entrepreneurs that have recently started a business or are planning to start a business, and one geared toward students with innovative technology-based business ideas. Competitors submit a written business plan that outlines the business idea, potential markets, production, requirements, and other standard items. a panel of judges reviews each business plan and invites qualifying entries to meet the judges and make a series of presentations at the competition. Cash prizes are awarded to the winners ($20,000 for 1st Place, $10,000 for 2nd Place [two awards], $2,500 for 3rd Place [2 awards]). First and second place winners will also have the opportunity to enter the national Worlds Best technologies Competition. through participating in the Giant Vision Business Plan Competition, many companies, even though they didnt win, have been financed through investor contacts made at the event.

Bioscience Industry Overview

Bioscience PhD Programs

the state of South Dakota has responded to the demand for more bioscience related educational opportunities by growing the educational programs offered in the public university system. South Dakota offers PhD programs in these fields of study: agronomy animal Science Basic Biomedical Sciences Biological Sciences Biomedical Engineering Chemical & Biological Engineering Chemistry Nanoscience and Nanoengineering Pharmaceutical Sciences

Facility Upgrades & Infrastructure

ReseaRch Facilities
In the 2008 Legislative session, $74.5 million was authorized to finance facility improvements to 11 science facilities and laboratories on all six public university campuses.

ReseaRch campuses
See Research Incubators & Parks section on page 19.

ReseaRch NetwoRk
the Research Education and Economic Development (REED) network provides high speed Internet2 connectivity between 10 South Dakota locations and locations nationally through the Great Plains Network site in kansas City and the Northern Lights network site in Minneapolis. the REED network provides researchers with access to the advanced technology resources needed to compete and collaborate with others around the world. the 10 South Dakota locations include the six state universities, the Graduate Education and applied Research (GEaR) Center in Sioux Falls, Sanford underground Laboratory at homestake in Lead, the Bureau of Information and telecommunications in Pierre, and the ERoS Data Center near Garretson (part of the Sioux Falls MSa).
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Bioscience Industry overview

PRIvate ReSeaRCh InItIatIveS Sanford health
an integrated healthcare system, Sanford health is aggressively expanding its decade-long commitment to health research. Following its receipt of the largest gift in healthcare history, the organizations presence as a world-class provider of healthcare services will provide increasing opportunities in health research. Sanford healths merger with Merit Care based in Fargo, North Dakota in 2009 creates one of the largest health care systems in the nation serving more than two million residents in a five state region. these capabilities will provide partner companies with the type of clinical population infrastructure necessary to advance medical innovation. Includes 29 hospitals, 120 clinics and 20,000 employees Nearly 800 physicians in more than 70 specialty areas access to more than 2 million outpatient contacts 200,000-square mile market service area in South Dakota, Minnesota, Iowa, Nebraska and North Dakota

saNFoRd ReseaRch / usd

Sanford health currently supports health research in the following areas: type 1 Diabetes Cancer Biology Childrens health Cardiovascular health health Disparities Womens health Methodology and Data analysis National Institute for athletic health & Performance

Sanford Childrens health Research Center

Beyond funding the development of a series of general pediatric clinics around the globe, Sanford has funded the Sanford Childrens health Research Center studying a variety of pediatric health concerns. this $20 million project includes a multi-site partnership with the Sanford-Burnham Research Institute and funds up to six principle investigators and associated scientists and staff in Sioux Falls, SD and La Jolla, Ca.

saNFoRd health NatioNal BReast caNceR iNstitute

a recent gift of $100 million will be invested in an initiative to create a world-class center for the research, diagnosis, and treatment of breast cancer. Plans for the center are young and more will be announced in late 2011.
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Bioscience Industry Overview

the saNFoRd pRoject FiNdiNg a cuRe FoR type i diaBetes

the Sanford Project is the singular focus of research capabilities toward an end-goal, finding a cure for type 1 diabetes. Sanford health is planning an investment of $30 million over five to seven years to advance the Sanford Project, and additional funding is expected from other external sources. Combined with the activities of Sanford Research/uSD, this effort will eventually lead to an annual research budget of more than $100 million per year and a staff of between 350 and 500 investigators, associate scientists and administrative staff.

RecRuitmeNt
this rapid growth is exemplified by the on-going recruitment of world-class research teams in a variety of areas. 2007 Sanford health welcomed Eugene hoyme, MD, a lead researcher in fetal alcohol syndrome 2008 John Lee, MD, began studies related to head and neck cancers 2009 Sanford Project Director Paul Burn, PhD associate Director alex Rabinovitch, MD associate Scientist alexi Savinov, MD, PhD associate Scientist Da-Qing Yang, PhD Six additional scientists being recruited Sanford Childrens health Research Center Director David Pearce, PhD three scientists Biostatistics Center Director Paul thompson, PhD

Facilities
Increased funding and focus within Sanford health will be the cornerstone for future development. as research expands, more modern facilities and support services will be necessary to handle the work that Sanford Research/uSD has in-house. to that end, Sanford has developed a nearly 300,000-square foot facility to house the current and planned activities of Sanford Research/uSD and partners. Futuristically, Sanford health will meet the constantly evolving needs of future partners and tenants as it expands its vision for the Sanford Research Park, a 185-acre campus located at the citys growing southwest corridor adjacent to Interstate 29.

Bioscience Industry overview

avera Research Institute
http://www.avera.org/amck/Research/index.aspx Started in 1998 with one founding director and a part-time nurse, avera Research Institute has grown into three divisions, with eight PhDs and more than 40 employees. the Research Institute is divided into three divisions: Basic, applied and Clinical research.

Basic ReseaRch divisioN

the three areas of focus in the institutes Basic Research Division include obesity-related kidney disease, neuroscience research in the area of stress-related sleep disorders and addictions, and oncology research involving DNa skin cell repair following exposure to ultraviolet light.

applied ReseaRch divisioN

the applied Research Division is more entrepreneurial with the goal of developing products for commercialization. this division has developed a medical adhesive which can either bind tissue to tissue or secure drugs to tissue.

cliNical ReseaRch divisioN

the largest division is the Clinical Research Division. at any given time there are usually 30 to 40 industry sponsored or investigator initiated clinical trials being conducted in a wide variety of therapeutic areas, from behavioral health to oncology, from infectious diseases to rheumatology. a major focus within this division is industry-sponsored clinical drug trials, which are either in Phase 2, 3 or 4 of the u.S. Food and Drug administration approval process. the newest addition to the avera Research Institute, the avera Institute for human Behavioral Genetics (IhBG), is the first clinical genetic research laboratory of its kind in the state of South Dakota. this type of research has come about only in recent years since the mapping of the human genome in 2000. avera IhBG research will seek to create a more complete understanding of an individual's genetic profile, interaction with environment and resulting mental health. ultimately, this research could lead to a better understanding of major behavioral health conditions, personalized treatment and more effective preventative strategies.

Bioscience Industry Overview

Rapid City Regional health

www.regionalmedicalclinic.com/research.asp the Clinical Research Department, a department of Regional health, participates in multiple research studies throughout the year. the department provides research coordination and study management services for physicians conducting clinical research studies. Regional health Clinical Research (RhCR) provides support to principal investigators conducting research from study start to study finish, including: assistance with the implementation and administration of clinical studies oversight of the submission process to the Institutional Review Board, including reporting requirements, submission forms, and informed consent Provision of financial services for new studies, including study cost analysis and budget formulation oversight of research participant registration and research billing assistance with study advertisement and patient recruitment RhCR provides support to inpatient, outpatient, surgical services, rehab, and a wide variety of specialty services, including: audiology Behavioral health Cardiac Surgery Cardiology Diatetics Endocrinology ENt (otorhinolaryngology) Family Medicine General Surgery Infectious Disease Internal Medicine Nephrology Neurosurgery oB/GYN orthopedic Surgery Pediatrics Podiatry Pulmonology Sleep Medicine travel Medicine urology

Bioscience Industry overview

BIOSCIenCe BY the nUMBeRS
Since 2001 the bioscience industry in South Dakota has grown exponentially. Gaining ground in 2003 with the 2010 Research Initiative, the industry soon took flight after 2005 when active recruiting of bioscience companies was underway. key sectors of the bioscience industry in South Dakota include ag Processing, Medical Devices & Equipment, and Research & Development. the bioscience industry in South Dakota employs more than 3,500 people within 180 establishments and pays an average wage of $45,067.

R&D

AG

MD&E

Bioscience Industr y
estaBlishmeNts
From 2001-2009, the number of establishments engaged in Biotech activities in the state grew by 55.2%, outpacing the Nations rate of growth of only 20.5%.

estaBlishmeNts
2001 Establishments 2009 Establishments Growth 2001-2009 Rate of Growth

S.D. 116 180 64 55.2%

U.S. 52,305 63,006 10,701 20.5%

employmeNt
From 2001-2009, the number of employees working in Biotech establishments in the state grew by 42.5%, outpacing the Nations rate growth of only 8.4%.

employmeNt
2001 Employment 2009 Employment Growth 2001-2009 Rate of Growth

S.D. 2,500 3,562 1,062 42.5%

U.S. 1,585,650 1,718,664 133,014 8.4%

aNNual pay
From 2001-2009, the annual Pay in the Biotech field in South Dakota grew by 24.4%, compared to the Nations growth of 32.4%.

aNNual pay
2001 annual Pay 2009 annual Pay Growth 2001-2009 Rate of Growth

S.D. $36,215 $46,067 $8,852 24.4%

U.S. $54,307 $71,901 $17,594 32.4%

Bioscience Industry Overview

Labor Force
South Dakotas labor force is ingrained with the renowned Midwestern work ethic. Its people are dependable, prepared, productive and ready to work. today this tradition of hard work is melding with technology and yielding a sophisticated, innovative and well educated workforce, ready to change the world and move your business ahead. the employment numbers on the previous page consider all employees within a bioscience establishment and include administrative, sales, production, and various other employees. the following information is limited to specialized bioscience occupations only.

occupatioNs
From 2001-2009 the number of people employed in specialized bioscience occupations in South Dakota increased 78.81%. Nationally, employment among bioscience occupations increased by 29.27%. Workers 2001 2009 Growth 2001-2009 Rate of Growth S.D. 1,510 2,700 1,190 78.8% U.S. 542,320 701,050 158,730 29.3%

gRowiNg BioscieNce occupatioNs iN south dakota

agricultural and Food Science technicians Biochemists and Biophysicists Biological technicians Biomedical Engineers Microbiologists Medical Scientists Medical and Clinical Laboratory technologists

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Bioscience Industry overview

graduates
In 2010, South Dakotas four bio-centric public universities graduated 398 students in bioscience related fields. additionally, from 2001-2010, the number of bioscience students graduating from South Dakotas public universities totaled more than 3,600. thats 3,600 highly educated and specialized professionals ready to staff your bioscience operations. additionally, when accounting for population size, South Dakota produces the 6th highest concentration of graduates in bioscience related degree programs.

Biotech gRaduates
BhSU nSU SDSU USD System total 2001 2002 2003 2004 2005 2006 2007 2008 2009 23 16 19 20 13 19 19 14 32 29 17 18 24 21 17 29 19 25 249 241 201 218 230 232 282 288 310 75 76 59 62 75 74 70 61 72 376 350 297 324 339 342 400 382 439 2010 31 23 286 58 398 total 206 222 2,537 682 3,647

BhSu - Black hills State university .................. Spearfish, SD NSu - Northern State university ..................... aberdeen, SD SDSu - South Dakota State university............. Brookings, SD uSD - university of South Dakota .................. Vermillion, SD

FY 2010 Degrees AwArDeD in Biosceince FielDs

4 AssociAtes Degrees 345 B A c h e l o r s Degrees 29 M A s t e r s Degrees 20 D o c t o r A l Degrees
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Bioscience Industry Overview

Public University System

South Dakota has a nationally recognized public university base that is continually expanding to meet the needs of todays industries. With research & development front and center, our university system is putting its money where its mouth is. South Dakotas universities are stepping up to educate tomorrows workforce. With expanded degree offerings, cross-continental collaboration opportunities, and sophisticated, state of the art facilities, you will tap into one of the best and brightest workforces in the nation.

academic Programs: Public Universities

Black hills state uNiveRsity
Biology Chemistry Medical technology Integrative Genomics

south dakota state uNiveRsity

agriculture & Biosystems Engineering agronomy animal Science Biochemistry Biology Biomedical Sciences Biotechnology Botany Chemistry Clinical & Laboratory Sciences Dairy Manufacturing Dairy Production Dairy Sciences General agriculture horticulture Microbiology Pharmaceutical Science Plant Science Range Science

NoRtheRN state uNiveRsity

Biology Chemistry Environmental Science Medical Laboratory Sciences

uNiveRsity oF south dakota

Biology, Molecular Biology and Physiology Specialization Biomedical Engineering Cellular & Molecular Biology Chemistry Clinical Laboratory Science Medical Laboratory Science Microbiology & Immunology Neuroscience Systems Physiology & Structural Biology

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ag Processing & Research

ag PROCeSSIng & ReSeaRCh
key ag sectoRs
Ethyl alcohol Manufacturing Soybean Processing Nitrogenous Fertilizer Manufacturing Fertilizer (mixing only) Manufacturing ag Research

of the nearly 3,600 people employed in the Bioscience Industry in South Dakota, 23.9% of them are employed within the ag Processing sector. Starting in 2001, employment in ag Processing employment increased by more than 640 workers or 318.7%. the number of establishments engaged in ag Processing & Research has more than doubled since 2001 with the addition of 17 new companies. Pay in this sector decreased slightly in the same time frame by 1.3%, a loss of approximately $600. Much of the growth in this industry from 2001-2009 is attributable to the ethanol industry. Since 2001, twelve new ethanol plants came online bringing the total commercial scale ethanol producing plants to 18.

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Ag Processing & Research

Major ag Processing & research coMPanies

DoW a g r o s c i e n c e s heMatech Monsanto M i DWe s t B i o D i e s e l Po e t Va l e r o

South Dakota is hungry for biotechnology businesses. that meant that when we were looking for a place to move our businesses, the entire state worked extra hard for us. that hunger has proven to be very valuable.
Eddie Sullivan, President, hematech

hematech, Inc.
headquartered in Sioux Falls, SD Founded in 1998 Subsidiary of kirin Pharma Company, Ltd. transgenic bovine research Best known for successes in producing the first transchronomosomic and gene targeted cattle

Monsanto Co.
harrisburg, SD St. Louis based agricultural company with operations worldwide. Specializes in maximizing the production of seed for farmers both in terms of yield and the technologies that are used to protect their crops a goal of the harrisburg facility is to produce crops with the Vistive variety which has linolenic acid to reduce the amount of trans fat in processed soybeans. South Dakota is especially attractive to Monsanto for further expansion considering the states acceptance of genetically modified crops. about 95 percent of soybeans produced in South Dakota in 2005 were genetically modified according to the u.S. Department of agriculture.
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In 2003, hematech formed a joint venture with trans ova Genetics. trans ova is one of the worlds largest bovine embryo transfer companies and has extensive experience in managing cloned and genetically modified cattle. Currently, hematech has four research and development programs: Molecular Genetics, Embryonic Cloning, Immunology, and Purification Process Development.

Medical Devices & Equipment

MeDICaL DevICeS & eqUIPMent

key medical device sectoRs

Nearly 50% of the Bioscience workforce in South Dakota, more than 1,700 people, is employed in the Medical Devices & Equipment sector. thirty-nine establishments are engaged in medical device and equipment manufacturing in the state and they currently pay an average annual salary of $36,378. Surgical appliances and Supplies Manufacturing Electromedical and Electrotherapeutic apparatus Dental Laboratories Surgical and Medical Instrument Manufacturing

there have been modest employment gains in this sector from 2001-2009, about 130 new employees or a growth rate of 8.15%. Most of these gains can be attributed to the Surgical appliances and Supplies Manufacturing sub-sectors. additionally, in this same time period, annual salaries have seen a steady increase of about $7,000, or 24.80%. Compared nationally, South Dakotas Medical Device sector is thriving. From 20012009 national employment in this sector decreased by 0.58% and the number of establishments grew only 0.31%.
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Medical Devices & Equipment

md&e compaNies
3M Dignity Medical Devices, Inc Electronic Systems, Inc EMPI Falcon Plastics, Inc Midwest Precision tool & Die, Inc oEM Worldwide orthotoic & Prosthetic Specialties, Inc PhotoBioMed Corporation tamcenan Corporation tetherX traco Medical, Inc ultiMed, Inc Vishay-Dale Electronics

PhotoBioMed
t h e
t e c h n o l o g y we a r e d e ve l o P i n g wo u l d n e ve r B e wh e r e i t i s t o d ay w i t h o u t t h e h e l P o f s o M a ny

empi
Clear Lake, SD Manufactures medical products for physical rehabilitation In South Dakota since 1986 Skilled local engineers on staff were able to build an in-house automation system

a n d i n d i v i d u a l s .... we h ave f a c e d

d a ko t a

south as

institutions

va r i o u s c h a l l e n ge s, w e h a v e a l w ay s B e e n a Bl e t o ge t t h e h e l P w e n e e d .

ultimed
De Smet, SD Manufactures diabetic supplies In South Dakota since 2001 Expanding for the 3rd time in 2010 Sales have increased six-fold since being in South Dakota
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D r. K a i a K l o s t e r , Director of life sciences

Research & Development

ReSeaRCh & DeveLOPMent

key ReseaRch & developmeNt sectoRs

Research & Development in the Physical, Engineering, and Life Sciences testing Laboratories Medical Laboratories Research & Development in Biotechnology

While the R&D Bioscience sector in South Dakota employs 26.9% of the Bioscience industry, approximately 1,000 people, its footprint contains more than 60.0% of the Bioscience establishments in the state. More than 100 establishments are engaged in Research & Development in South Dakota and they currently pay an average annual salary of $75,546. there have been notable gains in this sector all-around. From 2001-2009, about 350 new employees were hired (an 55.0% increase), 50 new establishments were planted (a 80.7% increase), and the average annual salary increased by more than $25,000 (a 57.8% increase). Most of these gains can be attributed to Research & Development in both Physical Engineering & Life Sciences and Biotechnology. Compared nationally, South Dakotas R&D sector is outpacing the rest of the country. From 2001-2009, national employment in this sector increased by 18.6%, the number of establishments increased by 31.1%, and pay increased 38.5%.

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Research & Development

R&d compaNies
alltech Biotechnology Center alphaGenix C-Lock technology Chronix BioMedical hematech, Inc omegaQuant analytics Permara pharmaCline PhotoBioMed Rural technologis, Inc

Pe r m a r a
S o u t h D a ko t a
reSearch. iS a ve r y go o D P l a c e t o D o

P e r S o n a l ly h ave exPer ience with larger S t a t e S l i ke

chRoNix Biomedical
Brookings, SD Genomics company Designs simple blood tests targeted at the earliest detection of chronic illnesses a partner in the Center for Infectious Disease Research and Vaccinology (CIDRV) housed at SDSu

califor nia a n D te x a S , a n D i w a n t to emPhaSize South D a ko t a h a S a r e a l l y

gooD SPir it for reSearcherS helPing e a c h o t h e r .

omegaQuaNt aNalytics
Sioux Falls, SD testing laboratory Located in South Dakota in 2009 Provides tests that measure the levels of omega-3 in the blood Founded by Dr. Bill harris, an internationally recognized expert on omega-3 fatty acids
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D r . yu y u S u n , a S S o c i a t e P r o f e S S o r, uSD

Research Incubators & Parks

ReSeaRCh InCUBatORS Brookings Bioscience Center
Brookings 10,000-sq.ft. 8 - 1,000-sq.ft. labs

Lease includes cabinets, sinks, etc. but not a fume hood. hood would be a tenant expense. all labs have negative pressure and open into a common hallway. Building has eight lab spaces total, large common meeting room, copier, break room, etc. Each lab has approximately 265 sq ft. office; 265 sq ft loft above office for secure storage, sleeping area for long lab tests, etc. and approximately 735 sq ft. Wet Lab Space. FoR moRe iNFoRmatioN http://www.brookingsbiospace.com

SDSU Innovation Center

Brookings 26,000-sq.ft. 3 1,000-sq.ft. labs

this building has two conference rooms, video conferencing, resource rooms, tenant work rooms, lunch/vending area, rotunda and lounge area, shipping/receiving area, and electronic whiteboards. the SDSu Innovation Campus Incubator is designed to provide companies maximum flexibility while working closely with them to identify areas of improvement and to assist in locating needed resources. the Business Incubator program is for a term of two years for most companies to grow in the incubator and then to graduate to a larger space on the SDSu Innovation Campus. FoR moRe iNFoRmatioN http://www1.sdstate.edu/InnovationCampus

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Research Incubators & Parks

heartland technology Center

Madison 10,000-sq.ft.

the heartland technology Center was built by the Lake area Improvement Corporation to provide office space for technology-based businesses and utilize the highly educated technological workforce from Dakota State university. the alliance between these two entities has developed an avenue to create high-paying jobs on a local level that will keep South Dakota students working in South Dakota. FoR moRe iNFoRmatioN http://www.madisonworks.com/

ReseaRch IncubatoR RosteR

omegaQuant analytIcs Pe R m a R a
PhaR maclIne

PhotobIomed

The presence of Research Incubators in South Dakota has proven to be an invaluable tool to young bioscience companies. The incubators provide shared services and mentoring opportunities that require a smaller investment and free-up funds for more important work.

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Research Incubators & Parks

Black hills Business Development Center

Rapid City 40,000-sq.ft.

the Black hills Business Development Center is committed to offering quality, affordable space to attract start-ups and businesses with growth potential. Within the Center, a full range of business services is provided free or at a low cost through sharing. Services include: Receptionist and administrative Services General use office Equipment Property Maintenance Meeting and Break Rooms Mentoring Business Consulting Funding assistance Post-secondary Student access FoR moRe iNFoRmatioN http://www.blackhillsbiz.com/

We chose South Dakota as part of a deliberate process... to find a location that combined the best business environment, state officials that understood the needs of starting businesses, and the overall taxation climate.... When I came to South Dakota, I was convinced.
Steve Keogh, Founder & CEO, pharmaCline

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Research Incubators & Parks

4701 Research Drive

Sioux Falls 15,000-sq.ft.

the multi-tenant building at 4701 Research Drive is owned by South Dakota Land Company and is part of a planned technology Business Park adjacent to Southeast technical Institute and the South Dakota technology Business Center (SDtBC), a technology-business incubator. the 4701 Research Drive building is currently 15,000 sq. ft and designed to be expanded to 30,000 sq. ft. this facility is currently home to DocutaP, an electronic medical records and practice management software company, and has 4,300 sq. ft. that is immediately available to be fit-up as wet lab and office space. the building has a backup generator for designated outlets and is connected to the SDtBCs telecommunications and network infrastructure. FoR moRe iNFoRmatioN http://www.sdtbc.com/flexible-facilities/4701-research-drive

geaR Center
Sioux Falls 21,000-sq.ft.

the GEaR (Graduate Education and applied Research) Center is a 21,000 sq. ft. lab facility designed for university and private sector research activities. the facility includes 4,200 sq. ft. of wet lab space on each floor, shared clean and light sensitive rooms, and private and open office space. the entire building is connected to a backup generator and DI water and fume hoods are available at each lab bench. the facility is connected to the new university Center campus where undergraduate, graduate and doctoral degrees are offered by four South Dakota public universities - the university of South Dakota, South Dakota State university, Dakota State university, and Northern State university. tenants have access to the university Center network and telecommunications infrastructure, shared meeting rooms and office equipment. the GEaR Center is designed for future expansion and is the anchor facility in a planned university Center Science and technology Park. FoR moRe iNFoRmatioN http://www.sdtbc.com/flexible-facilities/gear-center
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Research Incubators & Parks

Sanford Center

Sioux Falls 299,007-sq.ft. 71 acres, 40 acres undeveloped Increased funding and focus within Sanford health will be the cornerstone for future development. as research expands, more modern facilities and support services will be necessary to handle the work that Sanford Research/uSD has in-house. to that end, Sanford is developing a nearly 300,000-square foot facility to house the current and planned activities of Sanford Research/uSD and partners. other features include: Class 10,000 clean room Sophisticated clean water systems Manufacturing Process: compressed air, gases, vacuum Computer Room Full configured and isolated air and power Full Service Cafeteria (seats 300) Security and access control system Conference and training rooms of various sizes Fitness Center 1,544 parking spaces FoR moRe iNFoRmatioN http://www.sanfordresearch.org

South Dakota technology Business Center

Sioux Falls 38,000-sq.ft. 6 Wet Labs

the South Dakota technology Business Center (SDtBC) is a 38,000 sq. ft. business incubator providing facility-related and business development services to earlystage high tech companies. the SDtBC has six wet labs with ducted fume hoods and type II research-grade water. the SDtBC currently houses 10 technology-based businesses and provides business development assistance including: mentor boards, one-on-one business counseling, access to angel and venture capital groups, referrals to service providers (Small Business Development Center, Small Business administration, the Enterprise Institute, SCoRE, PtaC and the SD SBIR Center), and participation in educational and networking opportunities. FoR moRe iNFoRmatioN http://www.sdtbc.com
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Research Incubators & Parks

ReSeaRCh PaRkS SDSU Innovation Campus

Brookings 125 acres the Innovation Campus provides an effective working environment to conduct knowledgebased research for state-of-the art technology enterprises, research institutes, and laboratories. this environment fosters partnerships between the university, business, government, and the community. Business Partners located at the Innovation Campus have access to the expertise and services of SDSus research faculty, graduate, and undergraduate students. Your company will be part of an environment where faculty, students, business and industry researchers, as well as government scientists work together on the evolution of innovation, learning, ideas, research, and discoveries. FoR moRe iNFoRmatioN http://www1.sdstate.edu/InnovationCampus

Sanford Research Park

Sioux Falls 185 acres

the Sanford Research Park is a development located at the southern entrance to Sioux Falls in the southern intersection of I-29 & I-229 business loop. In addition to the office and research component, local developers have plans for retail, convention and other lifestyle amenities immediately to the south of the park (on an additional 182 acres). Plans are in the works for over one million square feet of office, research and light manufacturing buildings as well as walking/biking trails, and water features for an aesthetic appeal. FoR moRe iNFoRmatioN http://www.sanfordproject.com

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RegULatIOn Red Carpet, not Red tape
In South Dakota, we roll out the red carpet, not the red tape. our size is our strength. Well give you the attention you deserve. Well connect you with the right people, right away. Leaders at every level are available to help you with your location and when you call us, well call you back. We are confident that once you meet our people, you will see why so many companies have made the move to South Dakota. We support business, big and small, and we want your business to thrive within our borders.

animal Research
there are several IaCuC-approved animal-research facilities in South Dakota. there is one in Vermillion and two in Sioux Falls. animal research facilities are also located at South Dakota State university in Brookings. Several private-sector biotech research firms - including hematech, transova Genetics, and Spring Point Project - have located animal research and management facilities in South Dakota because of the flexible regulatory environment.

In South Dakota it is easy to do business. We are a start up company and we have access to the governor.... We didnt have to spend a lot of time hunting out organizations or agencies or anyone that would help us get started they actually came to us to help us get started. Craig Arnold, COO, Permara

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BUSIneSS COStS Utilities

South Dakotas utility providers range from Investor owned, to Rural Electric Co-ops, to Municipal utilities, giving you the advantage of competitive pricing. this competition gives South Dakota the 6th lowest electricity price in the nation and keeps electricity costs well below the national average. In 2009, Commercial Electricity customers in South Dakota paid an average price of 7.14 cents per kwh while the average Commercial u.S. customer paid 30.4% more at 10.26 cents per kwh. Further, since 1990, South Dakotas Commercial Electric price per kwh has increased by 0.46 cents, the 3rd lowest increase in the nation. Comparatively, the average u.S. Commercial Electric price rose 2.92 cents per kwh. Water and sewer systems are most often controlled locally, by the municipal utilities, a benefit that keeps your water and sewer rates low.

Lab equipment
testing & Laboratory equipment is expensive and owning the equipment your operation may need is not always possible. through the South Dakota BRIN (Biomedical Research Infrastructure Network) you can find resources and gain access to laboratory equipment from South Dakota State university and the university of South Dakota. Companies can access this equipment for low or no fees and usually the fees are significantly less than companies in the larger cities would have to pay. http://www.usd.edu/brin/services.html

Lab Space
the cost of lab space in South Dakota is significantly less than what you might find in larger cities and more prominently developed research-centric communities. Lab space starts out at about $17.00 per sq. ft. in South Dakota.

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BUSIneSS CLIMate
South Dakota businesses have consistently enjoyed a pro-business climate. Were the only state in the nation with no corporate income tax, no personal income tax, no personal property tax, no business inventory tax and no inheritance tax. as you read through the following information, youll see why so many businesses are choosing to call South Dakota home. No Corporate Income tax No Personal Income tax No Personal Property tax No Business Inventory tax No Inheritance tax Competitive Workers Compensation Rates Competitive unemployment Insurance Rates Lowest overall tax Burden Best State tax Business Climate Lowest Cost of Doing Business Best Environment for Entrepreneurs Eighth Best Corporate Business Climate Eleventh Lowest unionization Rate Right-to-Work State

taXeS Workers Compensation

In South Dakota employers can insure workers by the type of work done, not the overall company code, a procedure that often results in greater savings. also, South Dakota workers compensation is not charged against vacation, sick or holiday pay which can save you approximately 10 percent on workers compensation costs.

code title
0170 4511 4611 4825 4828 8833 Laboratory animals - breeding or care & drivers Medical Research or analytical Laboratory Pharmaceutical, drug or medicine preparation, compounding or blending - No Mfg. of Ingredients Pharmaceutical, drug or medicine preparation manufacturing & Includes Mfg. of Ingredients. Chemical Blending or Mixing NoC - all operations & drivers hospital - Professional Employees

advisoRy loss cost

$2.63 $0.51 $0.84 $0.69 $1.33 $0.94

In South Dakota, insurers are permitted to apply up to a 25 percent credit on a companys final workers compensation premium if the company qualifies after a safety or loss control inspection, and if the company agrees to the safety recommendations of the insurer.

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the average unemployment insurance rate for experienced employers is 2.06 percent. the wage base is $11,000. For new employers the rate is 1.75 percent for the first years operation and 1.55 percent for the second and third years if the companys account balance is positive. thereafter, the rate is based on the companys experience.

Unemployment Insurance

Real Property tax

Local real property taxes vary from 1 to 4 percent of the actual value of the structure, with most rates falling between 2 and 3 percent. the assessed value of a property is currently considered 85% of the market value. Property taxes are then calculated based on the assessed value of the property.

Sales, Use & Contractors excise tax

Manufacturing operations are subject to sales tax in South Dakota for any new machinery and equipment brought in for the new operation. any machinery and equipment that is seven years old or more is exempt from the sales tax in South Dakota. State Sales tax: 4.0% Local Sales tax: 0.0% to 2.0%

taX aBateMentS & ReFUnDS

County commissioners may, at their discretion, forgive from zero to 100 percent of the property taxes on a new structure or an addition to an existing one. this abatement may be available on all industrial, commercial and non-residential agricultural structures valued at $30,000 or more.

Property tax abatement

Sales, Use & Contractors excise tax Refund

South Dakota offers tax refunds (sales, use and contractors excise taxes) for new and expanding business facilities. to be eligible for the refund the total cost of a project must be a minimum of $10 million and an application must be filed with the Dept. of Revenue 180 days (approx. 6 months) from the start of construction. the amount of the refund on the sales, use and contractors excise tax is determined by the total project costs.

pRoject

ReFuNd

Less than $10 million None $10 to $40 million .....................................45 percent $40 to $500 million ...................................55 percent over $500 million ............................................. None
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FInanCe PROgRaMS
In South Dakota, we understand the needs of growing businesses. Weve tailored our financing programs to fit you and your business. and our programs are structured to meet your long-term and short-term financing needs. We also understand how important your time is. thats why to us, response time is priority. our team of professionals will help walk you through the process and will represent you well to our boards that make our loan decisions. Whether youre just getting started, or are an established business, South Dakotas economic development team is ready to work for you.

ReDI (Revolving Economic Development & Initiative) Fund**

Provides permanent financing for land, building, machinery and equipment, and associated installation costs 3 percent fixed interest rate available to start-ups or expansions amortization up to 20 years, based on useful life of financed asset(s) Five-year balloon Minimum 10 percent equity contribution; total REDI loan amount no greater than 45 percent of total project costs Job creation is a factor in determining loan amount 1.5 percent origination fee

eDFa (Economic Development Finance authority)**

Designed for more capital-intensive projects Lower interest rates to the borrower as a result of a+ rating by Standard and Poors Long-term, fixed-rate financing Provides small businesses access to the public bond market Bonds may be tax-exempt on projects that are less than $20 million in total project costs. taxable bonds are available for projects that exceed $20 million in total project costs Eligible for projects that operate an industrial, processing, storage, distribution, or manufacturing enterprise Permanent financing for land, building, machinery, equipment, and associated installation costs

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SBa 504**
Long-term, fixed-rate financing Fixed asset purchases are eligible available to all for-profit businesses, including retail operations as a Certified Development Corporation (CDC), the GoED offers 504 loans statewide

aPeX (agricultural Processing & Exporting) Fund**

assist companies that add value to ag products through processing assist companies exporting product out-of-state assist companies located in rural areas 3 percent interest rate 10 to 20-year amortization Six-year balloon May provide up to 75 percent of total project costs, or maximum of $237,500 uses include land and building acquisition, machinery and equipment, fees, services, and other costs associated with construction Must employ low-income persons, farm families, or displaced farm families Encourage job growth in rural areas with a population of 25,000 or less

South Dakota MicroLOan**

offers access to working capital for small enterprises 3 percent interest Five-year balloon Maximum loan amount of $100,000; minimum $1,000; total project costs cannot exceed $500,000 50 percent of total financing must be provided by a bank; balance from MicroLoaN and equity injection (if required by bank); MicroLoaN subordinates to bank involved application fee is the greater of 1.5 percent of loan amount or $50

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value added ag Subfund**
available for feasibility and marketing studies for value-added ag projects 0 percent interest on successful projects 3-year amortization Depending on the success of the project, the funds may be repaid over time or considered a grant Program provides 50 percent of total project costs for marketing or feasibility studies 10 percent equity injection required

Workforce Development training grant

Provides matching grants to assist companies with up to 50 percent of eligible training expenses assists with new and current employee training Companies must pay trainees $10.50 per hour and provide health insurance as part of the benefit package training must focus on the technical aspects of the job Funding is released on a reimbursement basis upon the completion of the training

Dakota Seeds
Provides matching grants for wages paid to interns and assistantships Company must create a new position for the internship or assistantship and must pay a minimum hourly wage of $9.00 Position must meet a critical workforce need or help the company grow Funds up to five positions annually Limited to matching funds of $2,000 for undergraduate students, $8,000 for masters degree students, and $10,000 for PhD students Grant is paid on a reimbursement basis

**Programs available for take-out financing.

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angeL InveStORS & ventURe CaPItaL

South Dakota has an active network of angel investment groups, as well as early and late stage venture capital companies. our investors are looking for technology based opportunities that may lead to new, innovative products and technologies. In South Dakota, we understand the important role a strong investment community plays in providing technology based businesses the capital that is essential to reach each and every milestone of development and commercialization.

venture Capital Firms

avalon Capital Group Blackline Capital Bluestem Capital Company Genesis Equity Fund Green Mountain Capital Group Linn Grove Ventures McGowan Capital Group Prairie Gold Venture Partners South Dakota Innovation Partners

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gOveRnORS OFFICe OF eCOnOMIC DeveLOPMent

711 E WELLS aVE | PIERRE, SD 57501 | P 1.800.872.6190 | F 605.773.3256 | WWW.SDREaDYtoWoRk.CoM