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A  SITE  SELECTION  SPECIAL  FEATURE  FROM  MARCH 2002


R&D Breakthroughs Fuel a Surge
in Bio-Sciences Industry Investment

Investment in the pharmaceutical and life sciences industries is giving communities throughout North
America a new lease
on life, with industry clusters emerging in most major metropolitan areas.

by Adam Bruns

McCarthy Building Companies Inc. recently completed construction of the $75 million Donald Danforth Plant Science Center in St. Louis.

C
orporations have been looking to biology for models since, well, the word "corporation" came into being. Not to mention "culture." Or that most recent development buzzword, "cluster." But anymore, life sciences don't just offer the schematics and metaphors for business community vitality -- they offer its lifeblood, too, in the form of pharmaceutical, biotech and other health sciences facilities and complexes (yet another term from the bio-lexicon).
      In 2000, more than US$33 billion was invested in the sector, outpacing the previous five years' investment combined. Pharmaceutical companies are currently spending more than $30 billion on research and development and have more than 1,000 medicines in development. While current drugs target hundreds of diseases in humans, the mapping of the human genome has revealed around more 20,000 targets for the genomics industry, which are waiting to be pursued by customized drug products. The total bio-device and bio-pharmaceuticals market has been projected to reach $400 billion by 2004.
      In many U.S. states, new life sciences projects and initiatives from both the private and public sector have been fittingly boosted by money coming from the federal tobacco settlement -- $100 million in Pennsylvania, $150 million in Louisiana and some portion of $170 million in Kentucky, to name just three. But part and parcel of this organic growth has been the establishment of new, collaborative channels between those clusters and corridors and non-bio infrastructure already in place.
      Frank Murphy, chief financial officer at Biopure, a maker of oxygen therapeutics, says the company's recent decision to build a $110 million facility in Sumter, S.C., was based in part on several tangibles beyond the laboratory (see the South Carolina Area Spotlight, January 2002).
      "We were looking to see if the normal job credits could be turned into up-front money which would then be paid back by credits as the jobs were in place," he says. "That was something Sumter and South Carolina were able to put together."
      It also helped that Becton Dickinson and Caterpillar had good things to say about their nearby operations, and that fellow pharmaceutical firm Roche had successfully made the transfer from a New Jersey facility to a plant in Florence, S.C.
      "This plan results in a validated, licensed facility in 2004 and maintains our previously stated timeframe for establishing a large-scale production capability," said Biopure Chairman and CEO Carl W. Rausch in announcing further financing. "In addition, the investment we've made in the design of this plant provides us with plans for the construction of future facilities."
      Murphy mentions a couple more pluses.
      "The state job training and recrui tment program will look for people, train people and present them to us," he says of the workforce development efforts touted by other companies. "Of the places we did a lot of detailed evaluation on, that program stood out, which would make our chances of early success quite a bit higher."
      Finally, the location of Shaw Air Force Base nearby may prove to be a boon, not only because of the labor force of "trailing spouses," but the fact that many retired military personnel like to stay in the area.
      Biopure will enter into a 20-year lease for the South Carolina facility with optional buyout provisions after three years, as well as the space to double its footprint once drug approvals begin to happen in various countries.

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