Virtually every location is a bio-hotbed, it seems. Even seemingly unrelated industries are watching where the sector goes. The July 2001 issue of Progressive Grocer recommended that retailers expand to cities that are pursuing biotech and pharmaceutical development.
      Unlike the often baseless investing euphoria that engulfed so much Internet funding, the attraction of biotech companies, volatile as they still are, is that their products are actual substances or devices, flowing through pipelines that are quite real, not conceptual. Some are even making money.
      "It's a much higher degree of intellectual property," Brian Clifford, vice president of SunAmerica BioTech/ Health 30, told the Wall Street Journal in January. While the 15 biotech mutual funds tracked by Morningstar were down nearly 23 percent in 2001 (compared to the average stock fund's plunge of 11.38 percent), the fourth quarter of 2001 saw those same funds rise by an average of 19.81 percent, beating out the average fund by more than five percentage points.
      Just as a microscopy laboratory usually needs a ground floor to minimize vibrations, the seed and mezzanine financing for life sciences initiatives must be attuned to the sector's special blend of volatility and promise. The funds are many: Boston's Saturn Life Science Partners is raising $70 million; Toronto firm Manulife Financial Corp. is raising $100 million through its MMC Life Sciences Opportunity Fund. In fact, according to the National Venture Capital Assoc., around $2.8 billion was invested in U.S. biotech companies in 2000, up 98 percent from 1999.
      It comes as no surprise that the top states in venture capital are also among the top regions for life sciences, especially when the cost of shepherding one drug all the way to the pharmacy's shelves can hover around $800 million. The Milken Institute's New Economy Index, based on figures from 2000, ranks states by their VC investment as a percentage of gross state product. Only four states surpassed 1 percent: Massachusetts (3.17 percent), California (2.86 percent), Colorado (2.58 percent) and Washington (1.15 percent). They are also the top four in overall new economy potential, taking into account such factors as patents issued and advanced degrees among the populace.
      Ross DeVol, Milken Institute Director of Regional and Demographic Studies, says the index "measures the new economy's critical attributes, which are based on innovation, knowledge and the ability to convert ideas into viable products and services."
      In Pennsylvania's Life Sciences Greenhouse project, Pittsburgh, Philadelphia and Central Pennsylvania are in one sense compe ting for their allotted shares: Pittsburgh wants $40 million toward its biotech incubator, Philadelphia is asking for $45 million and Central Pennsylvania wants $41.9 million. But at the same time, the cities are dedicated to working together toward the greater goal of long-term economic development.
      Pittsburgh's BioVenture project is backed by the significant health services and engineering resources of the University of Pittsburgh and Carnegie Mellon University, which are to serve as the cornerstones of a proposed $600 million, 10-year regional plan. Besides its well-regarded animal science department, Penn State's Nanofabrication facility hosts hundreds of users a year, and the medical research on that campus and at Lehigh University comes to a total investment of over $500 million. And Philadelphia's private sector infrastructure includes such notable players as AstraZeneca Pharmaceuticals, Merck, GlaxoSmithKline and Wyeth-Ayerst Pharmaceuticals. Backed by that city's universities, the Biotechnology Greenhouse's Port of Technology lab facility was dedicated at the end of December.
      The space shortage is critical in Pittsburgh, even though the Greenhouse project's aims are for a long-term research park in the North Carolina Research Triangle tradition. While anomalous experiences like the improvised Cellomics lease of 165,000 sq. ft. (15,300 sq. m.) at the $22 million Bridgeside Point building, originally designed as office space, are fortuitous, area developers are hoping for a more organized approach. One firm, BioSpace Development, is taking up the space challenge not only locally, but nationwide, seeking to develop life sciences campuses.
      Together, the Keystone State's clusters, like those in every other jurisdiction, hope to complement each other's strengths to make for a vibrant, statewide entity, but all are looking for more money, more expertise and more space.