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The U.S. Is Serious About Life Sciences

The biopharmaceutical and life science industries are recognized as important economic drivers across the nation.

Q4 2017
The life sciences sector brings high-paying and highly skilled jobs across a range of occupations. Pharmaceutical Research and Manufacturers of America reports that in 2011 the biopharmaceutical industry had a $375 billion direct economic impact and a $414 billion indirect and induced impact on the U.S. economy.

The industry faces a lot of pressure. TEConomy Partners LLC points to a list of factors: close ties required between industry, academia, and clinical care to advance innovation; the long, costly, and uncertain process of new product development associated with the high level of regulatory oversight and rigorous clinical trials required for biopharmaceutical product approvals; and the specialized nature of research capabilities, facilities, and talent associated with biopharmacetical R&D. These issues are outlined in detail in a June 2017 study entitled “Driving Innovation and Economic Growth for the 21st Century: State Efforts to Attract and Grow the Biopharmaceutical Industry.”

Top Locations
While locations throughout the nation are vying for their share of biotech/pharma activity, certain places within the U.S. are hot spots for the life sciences industry. JLL ranks the top 10 as being Greater Boston, San Francisco Bay Area, San Diego, Raleigh-Durham, Philadelphia, Suburban Maryland/Metro D.C., Seattle-Bellevue, New Jersey, Los Angeles/Orange County, and Chicago Metro based on life sciences employment concentration and growth, concentration of establishments, venture capital funding, NIH funding, and market occupancy rate.

Since early 2016, San Diego has seen over 2.4 million square feet added and 500,000 square feet under construction in the life sciences sector, JLL reports. The region is home to 1,400+ life sciences companies.

Phoenix Molecular Designs (MD), a Canadian-based biotech company focused on cancer therapy, announced in June that it is establishing a beachhead in San Diego to better access that city’s superb talent pool, network of existing biotech companies, and robust capital market. PhoenixMD executives explain that establishing strong ties between Vancouver and San Diego will enable the advancement of important discoveries into new medicines to expedite the treatment of cancer as well as other life-threatening diseases. “It is rare for biotech companies in Canada to establish themselves in the USA and to see a company such as PhoenixMD grow at this rate,” says company CEO Dr. Sandra Dunn.

Life Sciences’ Companies U.S. Investment Decisions

Biopharmaceutical and other life sciences firms are making investments in new and expanded facilities across the U.S. to pursue the latest research and development of new therapies.
  1. Phoenix Molecular Designs (MD)

    San Diego, CA

    Phoenix Molecular Designs (MD), a Canadian-based biotech company focused on cancer therapy, is establishing a beachhead in San Diego.

  2. Alnylam Pharmaceuticals, Inc.

    Norton, MA

    Alnylam Pharmaceuticals, Inc. — a leader in RNAi therapeutics — broke ground in April on a 200,000-square-foot, state-of-the-art biopharmaceutical manufacturing facility in Norton, Mass.

  3. Advanced Regenerative Manufacturing Institute (ARMI)

    Manchester, NH

    A new $280 million Advanced Regenerative Manufacturing Institute (ARMI) for Manchester, N.H., was announced in August.

  4. Jackson Laboratory Genomic Medicine (JAX)

    Farmington, CT

    The Jackson Laboratory Genomic Medicine (JAX) initiative is a state-of-the-art genomics research center on the campus of the University of Connecticut Health Center in Farmington.

  5. SCA Pharmaceuticals

    Windsor, CT

    In May, Arkansas-based SCA Pharmaceuticals announced its decision to build a new 90,000-square-foot manufacturing facility in Windsor, Conn.

  6. Pfizer

    Sanford, NC

    Pfizer is expanding its vaccine manufacturing plant in Sanford, N.C., representing an investment of $100 million.

  7. Dell Seton Medical Center

    Austin, TX

    In May 2017, the $310 million Dell Seton Medical Center at UT Austin opened its doors, anchoring a new healthcare innovation zone in downtown Austin, and serving as the primary teaching hospital for Dell Medical School.

  8. Pennington Biomedical Research Center

    Baton Rouge, LA

    Pennington Biomedical Research Center, which is part of LSU, has been involved in the development of all approved obesity medications on the market today, and many key diabetes medications.

Targeted Strategies
TEConomy reports that 41 states are pursuing a targeted strategy for biopharmaceutical-related development and 45 states are ensuring leading-edge bioscience research capacity and infrastructure. Forty-eight states are advancing innovation and entrepreneurial development to leverage their R&D efforts for economic development. Those with a strong foothold in the industry are also pushing new large-scale initiatives to pursue biopharmaceutical development.

For example, Massachusetts’s Baker-Polito administration announced in June a legislative proposal to bolster the state’s life sciences sector so that Massachusetts can continue its leading position in attracting world-class innovative and technologically driven companies. The proposal includes providing up to $500 million over five years for strategic investments in public infrastructure, R&D, workforce training and education, including up to $295 million in capital authorization and up to $150 million in job-creating tax incentives. The five-year, $295 million bond authorization would provide capital funding that will enable the state to strengthen the ecosystem through collaborations that maximize third-party investments and sharpen the Commonwealth’s competitive edge.

“Our administration has a strong commitment to increasing educational opportunities in science, technology, engineering, and math for students across Massachusetts,” said Lt. Gov. Karyn Polito in a statement.

One of those fast-growing companies, Alnylam Pharmaceuticals, Inc. — a leader in RNAi therapeutics — broke ground in April on a 200,000-square-foot, state-of-the-art biopharmaceutical manufacturing facility in Norton, Mass. Alnylam CEO Dr. John Maraganore pointed to the Commonwealth’s talent pool, strong support from state and local officials, Massachusetts Life Sciences Center, and the town of Norton as critical to its ultimate decision to establish a manufacturing facility there.

Massachusetts’ success has spilled over to neighboring New Hampshire, which is also becoming a leading national site for biotech and health services.

“We have been thrust into the spotlight by the August announcement of the establishment of the new $280 million Advanced Regenerative Manufacturing Institute (ARMI) in Manchester,” commented Taylor Caswell, Commissioner of the New Hampshire Department of Business and Economic Affairs.

The new industry center is attracting startups and established companies to rapidly enable large-scale biological manufacturing. “Combined with the presence of major divisions of Lonza Biologics on our Seacoast and Novo Nordisk in the Upper Valley near Dartmouth College, we have two big anchor companies in this space driving a whole new ecosystem of talent and training,” Caswell noted.

Connecticut is another state TEConomy identifies as expanding its efforts to pursue biopharmaceutical developments. Connecticut’s bioscience clusters focus predominately on medical devices and equipment, and drugs and pharmaceuticals. To foster their development, the state has committed $1.2 billion to Bioscience Connecticut, the Connecticut Bioscience Innovation Fund, and the Jackson Laboratory Genomic Medicine (JAX) initiative. JAX is a state-of-the-art genomics research center on the campus of the University of Connecticut Health Center in Farmington.

In May, Arkansas-based SCA Pharmaceuticals announced its decision to build a new 90,000-square-foot manufacturing facility in Windsor. SCA manufactures injectable pharmaceuticals in ready-to-administer dosages for use at hospitals and healthcare facilities. “Connecticut represents an ideal location for SCA, driven by its incredible workforce and myriad of transportation options,” said Dr. Gene Graves, CEO of SCA.

Long-Term Commitments
North Carolina, Arizona, and Texas are states that TEConomy Partners identified as having a long-term commitment to developing a biopharmaceutical industry, and they are experiencing major impacts.

Companies operating in North Carolina benefit from the state’s 3 percent corporate tax rate, the lowest in the country. The state also has the highest concentration of Tier 1 research universities in the country. Duke University, the University of North Carolina at Chapel Hill (UNC), and North Carolina State University are located within 25 miles of one another, and contribute to an established workforce pipeline, active industry partnerships, and an innovative business environment.

Companies that have recently announced expansions and relocations to North Carolina include Pfizer, which is expanding its vaccine manufacturing plant in Sanford to the tune of $100 million as a result of new gene therapies built upon a technology first developed at the UNC at Chapel Hill. The expansion is supported by a $250,000 grant from the One North Carolina Fund.Texas is home to some 4,000 life science and research firms, and 100,000 workers in related fields, as well as the Texas Medical Center, the largest medical center in the world. Companies with major operations there include Novartis, Abbott, Medtronic, McKesson, Galderma, Allergan, and Monsanto.

In May 2017, the $310 million Dell Seton Medical Center at UT Austin opened its doors, anchoring a new healthcare innovation zone in downtown Austin. Dell Seton will serve as the primary teaching hospital for Dell Medical School, the first medical training institution in nearly 50 years to be built from the ground up at a top-tier U.S. research university.

Other locations that are carving out a life sciences sector include Iowa; Cincinnati, Ohio; and Baton Rouge, Louisiana. For example, Iowa’s new Renewable Chemicals Production Tax Credit is a statewide business incentive that builds off the agricultural bioscience expertise at Iowa State University in Ames. The state recently invested more than $1 million to build a medical device prototyping lab in Iowa City to support the University of Iowa’s biomedical expertise.

The Cincinnati, Ohio, region is unique thanks to internationally renowned research hubs like Cincinnati Children’s Hospital Medical Center and the University of Cincinnati’s research hospital. Both regularly partner with biotech entrepreneurs to transform lab research into life science technology. Successful life science firms that have contributed assets, capital, and talent to the ecosystem including P&G, Ethicon, and Meridian BioSciences; along with successful serial entrepreneurs who have built and sold or IPOed a number of companies, such as Mike Hooven (AtriCure, Enable Injections) and Bob Beech (Intrexon, Eccrine Systems), according to Johnna Reeder, president and CEO of REDI Cincinnati.

Louisiana State University (LSU) is Baton Rouge’s anchor asset. Pennington Biomedical Research Center, which is part of LSU, has been involved in the development of all approved obesity medications on the market today, and many key diabetes medications. One of its most recent additions is a state-of-art-imaging center, used lately for in vivo imaging of brain activity related to dementia. The region is also home to the Baton Rouge Health District, a unique partnership between fierce competitors in healthcare, the health insurance industry, and the community.
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