It takes years of dogged persistence and lots of steps to get a biotech project funded and hopefully ... in a real long shot ... on its way to becoming a marketable product. That's in a good economy. Add to that the pressures of the current recession, and the scramble for funding ramps up. WFAE's Simone Orendain has this report on the prospects for biotech funding in the Charlotte region. The success of an organ transplant largely depends on how much time passes between the death of a donor and the actual transplant procedure. Seven years ago, UNC Charlotte Biology Professor Mark Clemens hit upon what he believes will address this problem. He explains, "We've developed a process that can take those organs and what we call perfuse them- substitute for blood flow- except with a special solution we've developed at a low temperature and what it does is it allows the organ to recover its function so when you then do that transplant, it works." Clemens and UNC Charlotte received $2.5 million from the National Institutes of Health for the project. It evolved into an organ transplant company called HepatoSys. As a stand alone company, HepatoSys received $2 million from the NIH, and a second grant is pending. But it's the third phase, coming in a year and a half, that worries Clemens most. He says, "This is what's known in biotechnology as the valley of death." Clemens says this crucial clinical trial phase will need outside investors willing to back an untested product. And getting that help is especially tough these days. Here's how biotech funding typically works: The NIH has two small business grant programs for very early stages of life science and technology research. These grants are part of a federal requirement for the Department of Health and Human Services to set aside two-point-five percent of its budget for outside research. The state plays a supporting role with a matching program. The commerce department has allocated $3.5 million for the program. But with budget constraints, fund administrators say the match is smaller than what it's been. They expect it to be even lower next year. From there, private investment kicks in. But the North Carolina Biotechnology Center's John Richert says that's drying up. And start-ups are coming to the center for loans. "With the economy the way it's been in the past year, the demand for our funding has increased. Whereas in the past, companies have been able to get money more easily from angel networks and venture funds, our funding has become of greater importance to those companies," says Richert. The center administers $200 million in state money that supports biotech education and training from the elementary to the community college level. It also set aside $20 million to lend to North Carolina-based startups. In recent years, investors have pulled back significantly from what they call risky ventures in this multi-billion dollar industry. Just this week, the accounting firm Ernst and Young said the economic downturn is forcing venture capitalists to get creative. Pricewaterhouse Coopers says in the first quarter biotech and medical device venture capital was down 40-percent to $989 million from the same period a year ago. Mark Arizmendi owns Charlotte-based Northwestern Capital Partners, which funds several biotech companies and other startups. Arizmendi says during this recession, he has stayed away from speculative investments and focused on what he calls strategic investment. He says, "The strategic investor may run the company for a period of time so we think that is really a good opportunity in today's market. We've been fairly successful at positioning companies that way." Arizmendi's biotech projects are in various clinical stages. His recent success was selling a license for a cancer drug, now it'll take another $80 million for a small clinical trial and a place to make the drug. Even this far into a project, there's no guarantee the product will be a success.