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Sky's the Limit for 2 Biotech Regions
7/23/2012 2:57:29 PM
By Michelle Wong, Biospace.com
Two regions that are doing exceptionally well in the biotech industry are Massachusetts and Southern California. Massachusetts, also known as Genetown, has flourished with its attractive resources such as its world class
academic institutions reeling in several well-established, as well as, start-up companies. San Diego, part of Biotech Beach, despite having undergone a downturn in the past year, has since redeemed itself as being one of the U.S.’s
top biotech hub.
Massachusetts
Massachusetts, a small state, has grown tremendously in the biotechnology industry within the last couple of years. Susan Windham-Bannister, president and
chief executive of the Massachusetts Life Sciences Center,
marked Massachusetts as being home to “one of the world’s leading biotechnology clusters, world-class academic and scientific institutions, top teaching hospitals, and the best educated
workforce in the United States.” Currently, the state is home to the greatest concentration of biotechnology research employees in the nation – comprising
more than 500 companies and more than 49,000 employees.
Since 2007, this state has certainly attracted well established biotech companies such as EMD Millipore, Sanofi, Pfizer, Novartis, Takeda, AstraZeneca, Merck and
Bristol-Myers Squibb
that have taken advantage of the two million square feet of space dedicated for new biopharma labs and manufacturing. To further attract companies into the
area, the Life Science Act recently awarded $21.2 million in tax incentives which it distributed to 28 life science companies. Under the terms of agreement, those companies that move must promise
to create 940 total new jobs in order to receive the incentive. If they fail to meet their promise, they will have the financing withdrawn. Among the
companies receiving these tax incentives are Vertex
Pharmaceuticals and AVEO Oncology
. As of now, Vertex Pharmaceuticals has agreed to commit to 100 jobs in return for $2.4 million, Raynham and Momenta Pharmaceuticals have agreed to create 50 jobs, and both Biogen Idec and Ironwood Pharmaceuticals are promising to add 75 jobs.
As established companies are moving into Massachusetts, start-up companies are establishing their roots there, too. Several venture and investor companies
are now eyeballing and showing interest in start-ups. For example, Catalyst Health
Ventures is currently looking to develop a new fund. In May 2012, the firm revealed a $33 million securities offering. The firm hopes to invest in
technologically advanced medical devices, drug development, diagnostics, and instruments. Companies which are included in their portfolio are GI Dynamics Inc., Hansen Medical Inc.,
Novazyme Pharmaceuticals, and Lantos Technologies.
Ember Therapeutics launched with $34 million worth of aid from
Third Rock Ventures, LLC. Other start-up companies include Warp Drive Bio and H3 Biomedicine.
San Diego
While Massachusetts continues to do well in the biotech industry, about 3,000 miles west of Massachusetts’ coast is San Diego. Prior to 2010, San Diego was
ranked among the top three metropolitan biotech cities receiving venture capital funding. In late 2010, however, it
dropped down
to fourth place. In 2011, it slipped again to tenth place. Reasoning behind this downfall may have been that early-stage experimental drugs were moving
out of San Diego. Venture companies may have decided to look where investments were less risky.
Since 2011, San Diego has
revitalized itself. It now stands as one of the U.S.’s top biotech regions. In the first
quarter of 2011, biotech investment nationwide fell 22 percent but San Diego’s venture investment rose. In its second quarter of 2011, San Diego received
$253 million worth of capital investments towards the development of new companies. In January 2012, San Diego received $357 million in venture capital
investment, 11 times the national average per-capita of biotech venture investment. Of the $357 million, $170.3 million went into biotechnology, $139
million went into industrial and energy sectors, $27 million went into consumer products and services, and $20.7 million went into other sectors.
With the $170.3 million portion dedicated to biotechnology, several start-ups focusing in R&D have received part of this share in efforts to lift their
companies off the ground. One of these start-ups is Celladon
Corp. which received the largest share amounting $43 million to fund research for developing drugs to treat heart failure.
In June, Astute Medical, a medical device company,
received $40.4 million in Series C Financing
which was led by MPM Capital and
Kaiser Permanente Ventures. Astute Medical plans to use its funds to expand R&D and to commercialize its first product, the Nephro Checka Test, for acute kidney
injury.
Global
Blood Therapeutics focused on sickle cell treatment, received $41 million from Third Rock Ventures.
In addition to start-up companies receiving financing, companies like Silicon Biosystems have already expanded in San Diego. Silicon Biosystems opened their laboratory facilities in May this year. The increased laboratory space will support the
expansion in the U.S. Market.
SG Biofuels, an energy crop company, recently opened their headquarters to support
commercial advancements. The additional space, covering nearly 60,000 square feet, is being used for laboratory, greenhouse, and office space.
Advanced BioHealing, Inc. is currently in the process of expanding. Its lease agreement with
BioMed Realty Trust, Inc., Inc. will allow the company to develop 150,000 square feet of additional
space which will be dedicated to the company’s support, commercial operations, manufacturing, corporate, and administrative functions. This expansion will
in turn create hundreds of local jobs to the 10 percent of people who are unemployed in San Diego.
More recently, at the end of June 2012, venture capital firms invested $304.8 million in 27 start-up companies. The city also ranked fifth in comparison to
other regions that received venture investments. The top ten investor deals included: Sangart ($50.7 million),
SmartDrive Systems ($47 million), Astute Medical ($40.5 million), Global Analytics ($25 million), ecoATM ($17 million), Obalon
Therapeutics ($16.5 million), AwarePoint
($14 million), and RT Oncology Services ($11.4 million).
As start-up companies continue to receive money and companies expanding their facilities, UC San Diego (UCSD) is seeking to construct a new “Center for Innovative Therapeutics” hub which would serve as an area for a variety of academic research
collaborations and a space for private start-up companies. In its proposal, UCSD will build a new facility a few miles away from this hub which will
include university research laboratories, a GMP manufacturing center to produce stem cell products, and a small-animal vivarium. The proposed facility will
allow private life sciences ventures to utilize the roughly 55,000 square feet of space for start-up companies dedicated to developing new drug compounds,
diagnostics, or medical devices.
Both Massachusetts and San Diego continue to do well in the biotech industry. Massachusetts has made its name for itself as being one of the world’s leading
biotechnology clusters. The small state’s great facilities and tax incentives have drawn in both well-known as well as start-up companies to the area.
According to a MassBio industry report, “Massachusetts continues to outpace other states and countries for biotechnology industry growth and investment.” Lastly, despite economic challenges,
San Diego’s future seems hopeful as it recently received a large amount of aid from venture investment companies to fund new companies for R&D this year.
Keep an eye out for these two regions where we can expect to see where jobs are growing most.
About the Author
Michelle Wong researches and writes about job search strategy, career management, hiring trends and workplace issues for BioSpace.com.
Read at BioSpace.com
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