Pharmaceutical/Biotech Siting: The Search for Space, Workers, ‘Community’ and Creative Financing

Today’s pharmaceutical/biotech site selection decisions are driven by factors both old and new.

On one hand, the industry is searching for skilled labor and room to expand, traditional location concerns, but increasingly scarce resources in today’s environment.

But much of the maturing industry is also looking for something new — full-service “community” sites for an enlarged focus in manufacturing and sales and “creative financing” that cuts new facility costs.

With unemployment at near-historic lows, skilled-worker concerns often dominate U.S. pharmaceutical site selection. Skilled-worker access is also becoming a key location concern for the maturing biotech industry.

However, for many cutting-edge firms, often headquartered in dense urban areas, a key site selection element is simply the need for room to grow — particularly in manufacturing. In many areas, there simply isn’t sufficient space to expand.

Increasingly, as biotech matures, springs from its scientific foundation and moves to its manufacturing phase, companies will seek places where there’s a rich community. Companies in many cases were established around core ideas, researchers or labs — resulting in a concentration in a finite number of places in America. But observers say what’s needed in the industry’s second phase is a full community.

Even as companies evolve from startup into integrated manufacturing/marketing, they’re often loathe to divert investments from intellectual pursuits into buildings and land. That aversion, however, creates economic development openings for creating financing.

Creative financing, for example, helped bring Human Genome Sciences (HGS) to Montgomery County, Md. A complex financing package allows HGS to pay only interest on its new $45 million manufacturing and process development plant.

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