Workforce and Supply Chain Top Location Must-Have Lists for Biopharma

Despite historic risk during the metamorphosis from glamorous high-tech startup to pillar-of-the-community manufacturer-employer, biopharmaceutical companies remain near the top of the list of industries that US states see as key to their economic future. Biotechs looking for a place to throw down roots are very much in demand these days as states seek to transition from economies underpinned by fading or troubled industries like tobacco, steel, and automobiles.

(Left to right) Chancellor Marty Meehan of the UMass Lowell; Jean-Paul Mangeolle, Millipore Corp., and Prof. Carl Lawton, UMass Lowell

“It’s perhaps the most common claim after renewable energy,” says Patrick Kelly, VP of state affairs at the Biotechnology Industry Organization (BIO) in Washington, of states’ assertions of their suitability for growing biotech businesses. “Governors have been talking for the last 10 years about biotech becoming a part of state strategic plans. Just about every state now has some strategic plan referencing life sciences as a rationale for creating high-wage, high-skill jobs to help them transition out of older industries into the bio-economy.” Since the talk started, he says, a lot of action has taken place, including the start of billion-dollar-plus initiatives in Massachusetts and Florida.

MITCH HOROWITZ, BATTELLE

One trend that pops out of Pharmaceutical Commerce’s survey of economic-development efforts this year is that local and state-based groups are linking up to strengthen their regional offerings. Southeast BIO, for example will be using this year’s BIO meeting in Atlanta to showcase its unified front for biopharma. Southeast BIO brings together groups in Florida, Georgia, Alabama, North Carolina, South Carolina, Tennessee and Virginia. Organizations in and around Philadelphia are promoting a biopharma cluster that crosses the state lines of New Jersey, Pennsylvania and Delaware. And California now has the California Life Sciences Alliance, uniting local efforts in the San Diego area, Los Angeles, and San Francisco.

When the objective is biopharmaceutical manufacturing, the deal sealers are not always the points making headlines in pitches by would-be hosts. In fact, financial incentives and manufacturing infrastructure (water, electrical, and wastewater facilities) aside, the key characteristics that make a location attractive to biomanufacturing companies are often a skilled workforce and proximity to manufacturing support, especially contract manufacturing and supply chain services. Such characteristics are more often the result of an entrenched manufacturing base and a community-college-level attempt to serve it, rather than a commercial garden cultivated by Ivy League innovation.

North Carolina knows this. After a half century refining the art of wooing high-tech industries to a region known for furniture making and tobacco growing, the state remains an object lesson in how to attract, land, and maintain a biomanufacturing presence. The Research Triangle Park mecca plans to maintain its status as an economic driver for the state by capitalizing on the growth of drug development and manufacturing outsourcing.

Contract research organizations, development organizations, and manufacturing organizations “are all strong in RTP and will continue to grow rapidly,” according to Charles Hamner, DVM, PhD, chairman of the board at the RTP-based Hamner Institutes for Health Sciences. Hamner is credited with playing a key role in transforming North Carolina into a biotech state and is considered a pioneer in state-sponsored biotech initiatives. North Carolina’s biotechnology center, community-college technician training, support from state political leaders, and Council for Entrepreneurial Development are some of the resources in place to support growth.

Accomplishments quantified

North Carolina business development officials have done a good job of quantifying their accomplishments, says Kelly of BIO. “They got tired of the announcements coming out of other states,” he says. “They released a report saying that they’ve already spent $1 billion on biotech initiatives and here’s what’s been accomplished and here’s where we’re going.”

The state is a member of Southeast BIO, a 1200-company nonprofit dedicated to fostering the growth of the life sciences industry in the seven-state region from Virginia to Florida. The organization has launched Southeast BIOtech Connect (available at www.sebio.org), an interactive database that outlines member companies and regional characteristics, for use by attendees to the upcoming Biotechnology Industry Organization (BIO) convention to schedule facility in conjunction with their mid-May visit to Atlanta.

Kelly adds that a long view is important in the bio-pharma industry. “Manufacturing is the culmination,” he says. “Given R&D and FDA-approval timelines, it takes 10 to 15 years and a billion dollars invested, once you’ve got your intellectual property.” Twenty years is therefore a reasonable timeframe to gauge the success of state efforts to attract biopharma business. Announcements made over the past few years—even those for billion-dollar initiatives—represent formative efforts, subject to prevailing economies. Many of the states that have placed such bets over the past few years are today in much different financial condition than they were when their initiatives were announced. Now they face the struggle of sustaining their commitment.

Economic challenge

Kelly notes that currently every state is in a bind due to budget constraints. “Time will tell who will emerge better off or worse off,” he says. Although they’re not top of mind in many biotech circles, Texas, North Dakota, and West Virginia currently have state budget surpluses and are therefore positioned to follow through on initiatives. Texas, for example, “is in the black and has a bond measure for $300 million per year for 10 years to do cancer research,” says Kelly.

He also notes the emergence of bicameral legislative caucuses dedicated to life sciences, charting a path forward in state legislatures. Fifteen states have put such caucuses in place, he says.

Another state to watch is Arizona, whose bioscience sector has grown into a major industry in the past five years, according to a study released in April by the Battelle Technology Partnership Practice (Bethesda, MD). Arizona’s nonhospital bioscience sector accounted for $3.6 billion in revenue and more than 13,500 jobs in 2007, the latest year statistics are available.

From 2002, when the state began attracting biotech, to 2007, economic activity in the sector increased 57%, jobs grew 20%, and tax revenues jumped 35%, according to the Battelle report. “This rate of growth is difficult to find elsewhere in the nation,” said Walter Plosila, the lead Battelle consultant who has been tracking the state’s bioscience sector, in a local press report. Plosila also authored a 10-year roadmap commissioned by the Phoenix-based Flinn Foundation in 2002 that outlines strategies for the state to take to become a bioscience hub.

“Some have described Arizona’s bioscience base as fledgling, but these numbers are very real and significant—and they’re growing rapidly,” says Marty Shultz, chair of the steering committee that oversees the implementation of the roadmap, in an announcement.

From car maker to drug maker

Also executing a roadmap is Michigan, in which 112 biotech companies have formed since 2000. The Pharmaceutical Research and Manufacturers of America (PhRMA) industry association chose the Wolverine state last fall as the location to unveil its report, Medicines in Development: Biotechnology, a tally of drugs in the latter stages of development. The Michigan location for the PhRMA announcement was not mere happenstance. “We believe that Michigan is one of the bright spots of biotech,” says Ken Johnson, a PhRMA SVP. “We wanted to highlight the progress being made there.”

Among biotechs that have recently thrown down roots in Michigan is Sequenom Inc. The San Diego producer of genetic analysis products announced in late September its agreement to acquire the Center for Molecular Medicine, a clinical diagnostics lab located in Grand Rapids’ so-called Medical Mile. The Michigan Street stretch represents more than $1 billion of construction within a decade, comprising research and patient-care facilities. Sequenom reported receiving a tax incentive package valued at as much as $20 million over 12 years.

In addition to tax incentives, Michigan’s 21st Century Jobs Fund helps to attract businesses in high-growth industries. Apart from the life sciences, its targets are alternative energy, homeland security and defense, and advanced automotive, manufacturing, and materials. The $30 million in funding this year was granted to 17 companies, 11 of them in the life sciences.

Workforce is key

Among ingredients for success in biotech manufacturing locations, workforce is among the most important. Mitch Horowitz, a biotech site-selection expert and director for strategy at the Battelle Technology Practice Partnership, notes the success of North Carolina in developing its biopharma workforce. “It’s well understood there that the depth of the workforce is the result of the willingness of community colleges to teach the skills needed for those kinds of production,” he says. “Those things matter.”

PAT KELLY, BIO

Like North Carolina, the mid-Atlantic states pride themselves on their biopharma workforce. Some 400 life science companies in the greater Philadelphia region employ 53,000 professionals and 310,200 workers in supporting roles, according to Select Greater Philadelphia, a regional economic-development marketing organization. Greater Philadelphia has more than 80 colleges and research centers affiliated with science and technology incubators, contributing to the biotech labor pool.

Thomas G. Morr, president and CEO of Select Greater Philadelphia, says that the region is ranked first in the United States in terms of the impact of the biopharmaceutical industry on its overall economy. Such large multinational companies as GlaxoSmithKline, Merck, Wyeth, Johnson & Johnson and AstraZeneca roost there, and the region boasts a strong commercialization capacity in addition to its public health focus. “We offer world-class infrastructure and unrivaled support resources to accelerate drug commercialization, from R&D through distribution,” he says.

Select Greater Philadelphia and partners have commissioned the California-based Milken Institute to study of the region’s bioscience cluster and measure its progress in an attempt to fuel expansion. Findings will be presented at the 2009 BIO International Convention in Atlanta. Partner organizations include BioAdvance, BioNJ, Delaware BioScience Association, Greater Philadelphia Life Sciences Congress, Pennsylvania Bio, the Pharmaceutical Research and Manufacturers of America, and PricewaterhouseCoopers.

Logistics and location

Like greater Philadelphia, Indiana has a manufacturing focus based on proximity in its biotech appeal. The state is home to Eli Lilly, Cook Group Inc., and Roche Diagnostics, as well as the Indiana University, with its School of Medicine and its Emerging Technologies Center, a business incubator that includes bioscience companies.

Indiana is also well positioned as a logistics center. More major interstate highways converge in the Indianapolis region than any other metropolitan area in the US, according to the Indy Partnership, a business development group for the 10-county Indianapolis region. Interstates 65, 69, 70, and 74 crisscross the region, resulting in 50% of the US and Canadian populations being within a one-day truck drive, and 75% of both populations being within a one-and-a-half day drive. Daviess County is the median center of population of the US. The state boasts a workforce of over 250,000 logistics employees and ranks fifth among states in volume of commercial freight.

Recent legislation has allowed Indiana to develop a $3.5-billion infrastructure improvement fund for its 10-year Major Moves highway plan for road and transportation projects. A $974-million upgrade to Indianapolis International Airport is underway, as well as improvements to public airports. And a planned expansion of the I-69 artery will connect the NAFTA superhighway through southwest Indiana.

Life sciences endowment

BioCrossroads, Indiana’s public-private collaboration to grow the life sciences, announced last fall the award of a $2.8-million grant from Lilly Endowment Inc. Through this grant, BioCrossroads works to “find, form and engage in strategic opportunities to build on Indiana’s life sciences assets,” according to marketing director Lori LeRoy. The multi-year grant funds charitable, educational, and scientific activities.

COOK PHARMICA'S CELL-CULTURING FACILITY IN BLOOMINGTON, IN, WAS SUPPORTED BY BIOCROSSROADSLINX.

Grants from the endowment to support BioCrossroads led to creation of several public-private-university collaborations, including in 2007 BioCrossroadsLINX, a nonprofit initiative for advancing Indiana’s capabilities in drug and biotechnology development and manufacturing through educational and workforce programs and interregional collaborations. It helps Indiana companies connect with one another as well as with biotech centers around the US, including San Diego, San Francisco, and Boston.

BioCrossroadsLINX has nearly 50 contract service providers for the pharmaceutical and biotechnology industries and more than 6,300 professionals working in toxicology, drug formulation, contract manufacturing, cold chain storage, to name a few.

Partners include the Cook Group, the Indiana Department of Workforce Development, the Indiana Economic Development Corp., Indiana University School of Medicine, Ivy Tech Community College, and Purdue University.

A foot in each camp

Like Indiana, greater Philadelphia, and North Carolina, Massachusetts recognizes the importance of a ready workforce for biotech manufacturing. But the Bay State chooses to plant just one foot in the manufacturing camp while the other remains in the more ethereal innovation/R&D camp.

In April, Massachusetts Biotechnology Council president Robert Coughlin unveiled a strategic plan that strongly advocates a focus on innovation, to capitalize on the proximity of Harvard, MIT, and other leading universities with biotech programs. “People aren’t coming here to open manufacturing plants,” Coughlin was quoted in a local press report.“They’re coming here from around the world to meet up with thought leaders.”

The strategic plan presents a 2015 vision that lays the foundation for the council’s future direction: “to help Massachusetts enhance its premier biotech position by strengthening its focus on novel research and development, facilitating scientific and business collaboration, and advocating for supportive public policies, ultimately transforming patient treatment globally while driving the growth of the Massachusetts economy,” according to the plan.

Although the plan does acknowledge that the state’s economic development efforts toward biotechnology are “complex and fragmented,” and that “municipalities often pose challenges to companies trying to establish an R&D or manufacturing presence,” it attaches less urgency to efforts to rectify these situations compared with finding capital for biotech startups.

Manufacturing campus

The council’s vision likely came as a surprise to such stakeholders as Millipore Corp., which within days of Coughlin’s announcement unveiled a process development laboratory at the University of Massachusetts’s Lowell campus, a few miles from corporate headquarters in Billerica.

The lab will “allow us to train our students on state-of-the-art equipment they will use in their future—or current—jobs,” said chancellor Marty Meehan at the opening ceremony. “Together, UMass Lowell and Millipore are helping to grow the life sciences workforce.” Millipore donated $225,000 in equipment and services to the laboratory, which will be used for downstream purification research as well as training for students and industry professionals. The equipment includes clarification, chromatography, ultrafiltration/diafiltration systems, and disposable mixing systems.

“Given the dynamic nature of our industry, access to cutting-edge technology and solutions is critical,” said Jean-Paul Mangeolle, president of the bioprocess division at Millipore. “By partnering with UMass Lowell, we further our own knowledge while supporting the local community and helping to educate students who will one day enter the workforce.”

The new lab is adjacent to, and works in tandem with, the recently outfitted IPS-Wyeth-Dakota Systems biomanufacturing pilot plant. Both are part of the Massachusetts BioManufacturing Center at UMass Lowell, an interdisciplinary research, development and education initiative supported by the University of Massachusetts and the state.

Retraining for biotech

Just one week earlier and 40 miles west, Worcester Polytechnic Institute launched a program intended to train displaced workers to fill hundreds of open jobs in biomanufacturing.

The “fundamentals of biomanufacturing” program was developed by a team from WPI, Abbott Laboratories, Bristol-Myers Squibb, Shire Human Genetic Therapies, and other life sciences companies to give displaced workers the knowledge and experience to make the transition into biomanufacturing. The first session of the eight-week evening certificate program began in late April. Displaced workers may be eligible for tuition support through the state’s individual training account program.

“This new program is a classic win-win,” said Stephen Flavin, associate provost and dean of Corporate and Professional Education at WPI, in an announcement. “It helps people obtain new skills and it helps the life sciences industry to continue growing in central New England.”

Asia connection

Diagonally across the country from New England is Biocom in San Diego, a regional life sciences association representing more than 575 member companies. The association focuses on initiatives for public policy, workforce development, group purchasing, and other services. But in contrast to other regional organizations, Biocom attempts “to position the Southern California life sciences community to achieve individual and collective success on the world stage,” according to Joe Panetta, CEO.

A current initiative involves capitalizing on Biocom’s West Coast location to aid biotechs in making connections in Asia. The organization is hosting CalAsia 2009 (biocom.org), an international forum to be held in June in San Diego to help member companies initiate relationships with companies in Asia.

“More companies want to understand how to do business in Asia,” says Panetta. “That’s what we are hearing from CEOs. We’re bringing the Pacific Rim to San Diego for two days to better make those connections.”

Panetta notes that a member company is actively selling products in Asia, but not all Biocom relationships involve manufacturing. Drug development and clinical research are also hot topics, especially given the lower cost of doing business in Asia. Some relationships are moving toward the development of manufacturing capabilities, with member companies expanding in Japan and China now.

“The biggest challenge is understanding how to initiate the relationship,” Panetta says. “We were being told by CEOs that they needed the opportunity to interact with the right people. We’re sending out staff to China to report back on opportunities. And in Australia, we’re finding that Queensland is a rich environment for clinical trials, with population demographics similar to ours. Plus, it’s more cost effective to conduct trials there. We’re helping companies to make those connections.”

Biocom also works with organizations that provide services to life sciences companies once they make relationships in Asia, including law firms and clinical trial organizations. “Once we help a company make a connection, the next step is that we network in the service providers,” Panetta says.

Biocom has company in California when it comes to representing biotechs. The Southern California Biomedical Council (SoCalBio) is a trade association of the life-science industry in greater Los Angeles that promotes the medical device and biotechnology industry in Los Angeles and Orange Counties as well as adjacent communities. BayBIO is the northern California’s life sciences association. All three are aligned via the California Life Sciences Alliance, which pools resources to address public policy issues, ensuring that elected representatives in Sacramento and Washington DC, as well as the public at-large, understand the life science industry’s impact and importance for California’s future.

“Biocom is a southern California organization,” says Panetta, “but our board has charged us with representing the industry. We advocate and promote southern California life science and medical device companies. Our membership includes universities and any group that interfaces with our companies.” PC