STRATEGIC INSIGHTSEconomic Development
Novartis expansion affirms the biotech force of the Northeast
By Barbara DePompa
May 15, 2004
| A century ago, the economic engine of Cambridge, Mass., was fueled by sugar. Today, that engine is fueled by science.
Numerous buildings that once housed Cambridge's robust candy industry have morphed into research facilities for the biotech industry. The most recent example is the New England Confectionery Company (Necco) moving its candy factory to Revere, Mass., and the 500,000-square-foot space being transformed into the world headquarters for the Novartis Institutes for BioMedical
Research (NIBR) — U.S. corporate headquarters and an R&D facility for the multinational pharmaceutical giant.
In 2003, Novartis' total revenue increased 19 percent to $24.9 billion, with pharmaceutical sales climbing 18 percent to $16 billion. This success no doubt helped the Basel, Switzerland-based giant make the decision to build a costly R&D facility — $4 billion over 10 years — in one of the most expensive regions in the United States.
SWEET SPOT: Confection engineers pack Necco Wafers, circa 1940. The landmark building is being transformed into the new headquarters for the Novartis Institutes for BioMedical Research.
But Novartis had considerations more important than cost, says Fintan Steele, a corporate vice president and global communications director for the company, beginning with the need for better control over research and more focused development to help find the molecular pathways among related diseases. It also had the desire to leverage that knowledge to create new drugs, he adds.
Rather than outsource this knowledge, Novartis decided to build a presence in the United States and keep R&D in-house to "feed at the same trough of knowledge that biotech companies and academia rely on, and then select specific areas to focus on," Steele explains.
The Cambridge facility will house more than 600 scientists (with 1,000 employees total) and focus on integrating previously segregated scientific disciplines, fostering interaction among scientists from within and outside the corporation, and developing partnerships with local academic research institutions and biotechnology companies.
| JOB OPPORTUNITIES: Novartis is scrambling to hire more than 600 scientists to fill these and other seats.
Initially, Novartis explored locating in San Diego, San Francisco, New York, or Washington, D.C. But Cambridge's proximity to a vast number of clinical experts at hospitals and universities in the region swayed the decision. MIT and its Whitehead Institute for Biomedical Research, for example, are located nearby, as is Boston University, Massachusetts General Hospital, Beth Israel Deaconess Medical Center, Harvard Medical School, Tufts University, and many other research institutions.
"Each of these institutions has amazing centers for chemistry, science, and engineering, enabling us to foster collaborations and work with many talented scientists who can give us the tools we need to push our research forward," Steele says.
As a biotech hub, Cambridge indeed puts Novartis in the midst of one of the world's most impressive pools of scientific talent. According to Paul Grafmuller, associate director for staffing at Novartis, the biggest worry is meeting a huge demand for new talent. With the opening of the Necco facility this spring, Novartis is currently scrambling to hire those 600 scientists for the new digs. "While the area is rich in scientific talent, from chemists to biologists, the numbers we want create a challenge," he says.
| TRANSPARENCY: One of Novartis' design goals is a work environment that integrates often-segregated scientific disciplines in order to foster interaction. The company also hopes to collaborate with other researchers in and around the biotech hub of Cambridge.
If the human resources staff is stressed, Steele says that's understandable, but the high bar for hiring will likely be cleared, given the available talent. He estimates Novartis has received more than 7,000 applications for those job openings.
In addition to the proximity of other scientific organizations, the region boasts the cultural and quality-of-living amenities of the Boston area, which is situated close to the New Hampshire mountains, and is only a short plane ride to New York City and other East Coast cultural meccas.
Long, cold winters and a high cost of living are the primary detractions. Housing costs within the Boston metro area, in particular, are exceptionally high, making it difficult for many potential employees to find homes within an easy commute of Cambridge. Novartis is working with the Massachusetts Biotech Council to help defray those costs, Steele says. And the company sees its ability to offer flexible hours, for example, as an effective means of helping new hires cope with the need to live farther away from the office.
Barbara DePompa writes about business and technology. E-mail: firstname.lastname@example.org.
> From Corn Belt to Bio Belt
PHOTO CREDITS: OF NECCO FACTORY COURTESY OF NECCO; DESKS AND CHAIRS BY FURNALD & GRAY; ELEVATOR BY FURNALD & GRAY; TOWER FURNALD & GRAY