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A  SITE  SELECTION  SPECIAL  FEATURE  FROM  MARCH  2001
Why Biotech Hot Spots Are Getting Hotter


Where Biotech Thrives

"From a site perspective, you need to be in one of the biotech brain clusters," explains Dan Malachuk, Worldwide Director of Business Location Services for Arthur Andersen in New York City. "Generally, we're looking at fairly prosperous places which are attractive to people who make money and want to spend it."
        As much as Boston, the Bay Area and the other long-time biotech hot spots look ready to grow even more, there are quite a number of relatively unlikely contenders for the biotech hot spots of the future. Rust belt states and the upper south, Delaware and the Midwest are all making major pitches to set up biotech centers of their own. It's going to be hard going.
        Much of the biotech activity in the Boston area has been in Cambridge and the suburbs. But the city itself is on the verge of a huge biotechnology expansion with plans recently announced for a $650 million Biosquare development on Albany Street. The project is being built by Boston University and Boston University Medical Center to house biotech companies. Biosquare is luring companies with made-to-order lab space in a campus-like setting, all in the backyard of Boston University Medical Center, a ready source of researchers and patients for clinical trials.

The Pharmaceutical State?

New Jersey ranks first in the nation's traditional pharmaceutical industry, with the nation's largest concentration of businesses producing prescription drugs and 20 of the world's largest pharmaceutical and medical technology companies headquartered in the state, including Pfizer, Hoffmann-La Roche, Bristol-Myers Squibb Co. and Merck & Co. According to the state's commerce department, more than one-third of new FDA-approved drugs during the 1990s originated in New Jersey.
        On the biotech side, New Jersey's attraction and retention programs include an aggressive technology-transfer program and a state business incubator and Technology Center -- a 50-acre (20-ha.) site that offers affordable laboratory and production facilities.
        Princeton University, with its molecular biology, biophysics and biochemistry departments, is a particular draw in New Jersey, along with Rutgers University.
        In October 2000, Lavipharm Laboratories dedicated a new 50,000-sq.-ft. (4,600-sq.-m.) facility on 27 acres (11 ha.) in East Windsor, N.J. This facility will be home to Lavipharm's worldwide corporate research and development, business development and marketing and sales teams outside of Greece.
        "We chose to be located here, near the campus of Princeton University for two reasons," says Dr. Athanase Lavidas, chairman of Lavipharm Laboratories. "First, we have access to the best of the nation's scientific talent. And second, it keeps us close to our partners and potential partners." Lavipharm specializes in making promising molecules viable and feasible for pharmaceutical use.
        Don Drakeman, president and CEO of generic drug developer Medarex, in Princeton, settled in the area 12 years ago and has a broad perspective on its popularity. For one thing, plenty of pharmaceutical executives live in the area, and when they make their entrepreneurial move, they stay around, he relates. For another, biotechs, which depend more on biological research than chemical, as do the traditional drug companies, can be spawned by the drug companies themselves as well-capitalized spin-offs, or drug companies can simply invest in existing biotech start-ups. This is all in an effort of drug companies to diversify into the new and growing area of biotech.
        Proximity to funding sources doesn't hurt Princeton's case, either, notes Drakeman. "There's several billion dollars on Nassau Street alone between the venture capitalists and other investors," he says.
        Ironically, Medarex's technology came from research conducted at New Hampshire's Dartmouth College, but Drakeman makes good use of local talent.
        Compugen, a Tel Aviv-based bioinformatics company that markets software that analyzes and organizes vast amounts of genomic data, recently settled on Princeton for its U.S. office. It also opened a subsidiary sales office in Sunnyvale, Calif., in the Bay Area. "Our New Jersey location was chosen for its close proximity to the major pharmaceutical companies, and the local biotech concentration in Princeton," says Albine Martin, managing director, functional genomics.
        In Maryland, the National Institutes of Health, in Bethesda, along with the Univ. of Maryland and Johns Hopkins University, have kept the biotech industry cooking in the state for the past 10 years. The institutions provide a steady stream of researchers, and in the case of NIH, grant money for research, much of which finds its way to commercialization.
        Celera Genomics, a key company in the sector, is headquartered in Rockville, Md., while Human Genome Sciences has recently identified a site suitable for building a 1-million-sq.-ft. (92,900-sq.-m.) campus, according to James Cahill, vice president in charge of The Staubach Company's Maryland office. "Companies have been growing and expanding here," he says. "The firms that used to get along with 20,000 to 40,000 sq. ft. (1,800 to 3,700 sq. m.) are now looking for campus sites for strategic growth and maximum physical security."
        Bioinformatics is especially well-poised to grow in the Capitol area generally. In addition to the biological and pharmaceutical research talent, Maryland and Virginia abound in IT talent. Virginia in particular is well-wired with the data centers, fiber and redundant facilities that bioinformatics firms require.


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