AstraZeneca opened an 80,000-sq.-ft. (7,432-sq.-m.) expansion of its facility in Waltham, Mass.

Biotech Is Back,
But for How Long?

With more than 40 states offering lucrative incentives to biotech firms in hopes of replacing vanishing jobs in traditional industries, is the stage being set for a big case of biotech nausea as fledgling firms exchange job creation promises for big monetary deals from states?
        "Biotech is just one way to diversify," says Walt Plosila, vice president, public technology, Battelle Memorial Institute. "It won't replace vanishing manufacturing jobs. Doing anything to excess is dangerous. Hopefully, we've learned from the dotcoms."

A Look at Recent Bio-Pharma Projects Biotech and pharmaceutical project announcements continue at a rapid clip. Here's a look at some major recent projects from A to Z.         Pharmaceutical heavyweight AstraZeneca opened 80,000 sq. ft. (7,432 sq. m.) of new laboratory and office space in October at its Waltham, Mass., R&D facility and plans to add more than 100 jobs. The facility will continue its focus on developing treatments for cancer and infectious diseases.         Boehringer Ingelheim Pharmaceuticals plans to expand its Ridgefield and Danbury, Conn., campus with a $400-million- to $500-million-dollar project expected to create 500-700 jobs over the next six years. The company is moving the cardiovascular research that has been conducted in Biberach, Germany, until now.         ZymoGenetics, a biopharmaceutical firm specializing in development of therapeutic proteins for the prevention of cancer and other diseases, is expanding its Seattle headquarters by adding 45,000 sq. ft. (4,180 sq. m.) of research and development space. The $26-million project will be complete in June 2004.

        Regions seeking to attract biotech investment must first understand the niches of the industry and their strengths relative to these niches, Plosila says. Research campuses are constantly churning out these new niches such as bioinformatics and proteomics, he says.
        "There is opportunity for many regions if they can focus and collaborate to make it happen," Plosila says. "You ask companies what's important to their success and more and more it's talent. And talent demands quality of life. States are putting a strong focus on retaining their top graduates and attracting earlier graduates back. One way is through strong K-12 programs. Top biotech talent wants to live where their kids can get a good education."
        As the biotech industry evolves, it continually spawns niches. Steven Burrill, CEO of Burrill & Co., a San Francisco-based life sciences merchant bank, believes one of the next emerging markets is in wellness. With 90 percent of the world's population well, the potential for developing products to keep them that way is huge, says Burrill, manager of a $450-million venture capital fund and one of the industry's biggest advocates. He also says while biotech was "back" in 2003 following a couple of down years, the coming year is a little iffy.
        "We're going through a robust market, but I'm a little skeptical about the second half of next year," Burrill told an audience at the recent Georgia Life Sciences Summit. "We need a more user-friendly regulatory environment."
        Pete Pellerito, a Research Triangle-based policy advisor to the Biotech Industry Organization (BIO), says small biotech companies will continue to sprout in areas supplying sufficient infrastructure. Pellerito helps public officials, developers and the industry understand what it takes to site biotech and pharmaceutical companies in new locations.
        "Life sciences companies require so much physical infrastructure from the get-go," Pellerito says. "Companies need to be near the assets they need to be successful – research universities, accessible libraries and qualified people. Because of that, there are not a lot of places where biotech research happens. In biotech manufacturing, the needs are different. They require a service provider community of accountants, search firms and contract research organizations. They don't have to be close to a university, but must be in a community with a qualified, available work force."
        Pellerito believes budget woes in many states will increasingly limit incentives. He says many regions are adopting the organic growth philosophy of keeping what they have and developing it rather than drawing in new companies.

ZymoGenetics is expanding its Seattle headquarters with a 45,000-sq.-ft. (4,180-sq.-m.) addition. Elsewhere in the city, California-based Amgen is relocating its oncology R&D operations to facilities formerly operated by its recent acquisition of Immunex.

        "That's where the growth is going to happen, certainly for the next couple of years," Pellerito says. "There's a tremendous effort by states and counties to identify who the companies are and how to keep them by backfilling their needs."
        Plosila says while there has been some movement of bioscience firms from California to escape poor business conditions, to date it's been more talk than reality. But, he says, "a lot of start-ups and existing firms are getting fed up." He describes the California venture capital community as the "last bastion of refusal to look outside the state."
        "They are still inward looking," Plosila says. "They think California has the monopoly on talent. It doesn't."
        Pellerito predicts more partnerships between biotech and pharmaceutical firms.
        "We will see some consolidation in the industry as they become closer," he says of the two sectors. "There should be some strong opportunities for states like New Jersey and New York in bio-manufacturing, as opposed to chemical-based manufacturing."