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| A Bio·IT World special section
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STRATEGIC INSIGHTS 

By Bob Violino

June 15, 2003

Special Issue 
· State of the States for Biotech
· Northeast Region
· Mid-Atlantic/Southeast Region
· Midwest/South Region
· Northwest Region
· Southwest Region
Massachusetts 
University and Research Hub 

There are 280 companies involved in biotechnology or pharmaceutical R&D and manufacturing in Massachusetts, according to the Massachusetts Biotechnology Council. These include several big pharmas that have R&D and manufacturing operations in the state. The majority of these companies are small to midsize.

About 30,000 people work in the Massachusetts biotech and pharmaceutical industries, not including pharma representatives who sell drugs. That figure is up 20 percent over the past five years, according to the council, which recently issued a report on the biotech industry in Massachusetts in conjunction with the Boston Consulting Group. The report notes that half of all industrial jobs created in the state since 1996 have been in biotech. But Massachusetts has not been growing as aggressively as other states such as California and North Carolina in terms of venture capital for biotech, observes Stephen Mulloney, director of policy and public affairs at the council.

Massachusetts
· 280 biotechs and pharmas 
· 30,000 biotech and pharma employees 
· Biotech accounts for half of all industrial jobs created since 1996
The Bay State, however, still has one of the most robust university and research center networks supporting biotech R&D. Among the leading private institutions are the Massachusetts Institute of Technology, Harvard University, Boston University, Tufts University, and Northeastern University. Public institutions with biotech programs include the University of Massachusetts Medical School and the University of Massachusetts campuses at Lowell, Amherst, and Dartmouth. Research institutions involved in biotech include the Whitehead Institute, Whitehead Center for Genomic Research, Forsyth Institute, and Roland Institute.

Connecticut
Investing in Bio Facilities


Infrastructure and resources: CURE (Connecticut United for Research Excellence) was commissioned by the state as the center of the bioscience cluster. CURE advocates for and promotes a business and regulatory environment conducive to the development of the Connecticut bioscience industry and maintains survey information on the growth of the industry. The Office of BioScience within the state Department of Economic and Community Development (DECD) facilitates growth and recruitment of bioscience companies by working with state departments to provide services and solutions. Connecticut Innovations Inc. is a quasi-state organization that invests in bioscience startup companies and manages the BioFacilities fund. Connecticut Economic Resource Center (CERC) provides information on facilities and locations and access to other state departments and public and private services.

Financial incentives: $60-million BioFacilities fund to outfit laboratories; 6 percent tax credit for R&D; 20 percent incremental increase to R&D tax credit; research tax credit exchange (65 percent of unused R&D tax credits); Net Operating Loss carryover for 20 years; property tax abatement in designated enterprise zones; sales tax relief on bioscience materials and equipment; guarantee on machinery and equipment loans for early startup companies through local banks.

Key academic and research organizations: Yale; University of Connecticut Medical Center at Farmington; Connecticut College; Quinnipiac University; Rensselaer at Hartford; Trinity College; University of Connecticut; University of New Haven; Wesleyan University.

Area bio/pharma organizations: Bayer; Boehringer Ingelheim Pharmaceuticals; Bristol-Myers Squibb; Pfizer; Purdue Pharma; Achillion Pharmaceuticals; Alexion Pharmaceuticals; Cellular Genomics; CuraGen; Genaissance Pharmaceuticals; Institutes for Pharmaceutical Discovery; Molecular Staging; Neurogen; PhytoCeutica; Protein Sciences; TurboGenomics.

www.ct.gov/ecd

Information provided by the state.

While eastern Massachusetts is among the most expensive places to live in the United States, the tax and business climate in the state has improved over the past decade, Mulloney insists, and is favorable to the biotech industry. The Massachusetts Department of Economic Development, for example, offers several financial incentives, including an Emerging Technology Fund, which provides loans and guarantees for specialized buildouts and equipment needs; an R&D tax credit; tax credit for investing in new plants and equipment; an R&D sales tax exemption; and an exemption from local property taxes for R&D and manufacturing firms.        www.mass.gov



New York
Biotech Empire State 

New York has 87 biotechnology companies whose operations cover a broad range of specialties, according to a study by the New York Biotechnology Association. Most of the companies are concentrated in the metropolitan areas around New York City, Buffalo, Rochester, and Albany, with biotech employing more than 5,400 people in the Empire State. In addition, there are about 265 companies involved to some extent in life sciences, including 14 facilities of large pharmaceutical companies and nine generic drug makers. The state's four largest biotech companies employ nearly 2,000 workers, accounting for about 40 percent of the total biotech employees. Total biotech employment in New York has grown at nearly 30 percent annually since 1997.

Since 1995, the state has invested more than $1 billion in high-tech and biotech, as well as research labs and academic centers. The 2003-2004 budget proposed by the governor includes a state tax incentive to leverage up to $250 million in new venture capital investments for small and emerging businesses connected to the governor's Centers of Excellence program and other state-supported research facilities.

New York
· $4.6-million tech transfer program
· 265 life science companies 
· $1-billion state investment in high tech and biotech
The high-technology expansion of the Certified Capital Company (CAPCO) program would authorize $125 million of additional CAPCO tax credits to small businesses affiliated with certain state-supported R&D centers, and this would apply to biotech companies, according to the New York State Office of Science, Technology & Academic Research.

New York has a $4.65-million Technology Transfer Incentive Program, designed to help business make a rapid transfer of ideas and technology from the lab to the marketplace. The program funds a wide range of projects at both public and private research institutions, supporting activities such as creating business and marketing plans, obtaining venture capital, filing patent applications, and product evaluation and assistance.       www.nylovesbiz.com



New Jersey
Still Big Pharma Country 

New Jersey hosts some of the largest pharmaceutical companies in the world, but also has 110 biotech companies employing about 8,000 people, according to Debbie Hart, president of the Biotechnology Council of New Jersey. These range from very small startups to established firms. About 200 pharmaceutical companies call the Garden State home, employing roughly 68,000 people. These include major research-based companies, small drug development companies, and generic drug makers that don't conduct research. New Jersey's life science industry added 5,403 jobs between 1990 and 2000.

New Jersey
· 50-acre Technology Centre
· 310 biotechs and pharmas
· 76,000 biotech and pharma jobs
The state government is considering a plan, designed to improve the quality of New Jersey's health and science education, in which the University of Medicine and Dentistry of New Jersey, Rutgers, the State University of New Jersey, and the New Jersey Institute of Technology would be combined into a single research university system with three distinct, autonomous university campuses.

The New Jersey Economic Development Authority (NJEDA) offers several financial programs to assist biotech companies. The Technology Business Tax Certificate Program enables high-tech companies in the state to turn net operating losses and R&D tax credit carryovers into cash for their businesses. Qualified companies can tap into $40 million annually to use for working capital, buy equipment or facilities, or cover other expenses, says Caren Franzini, executive director of the NJEDA. The program is aimed at biotechs and other expanding businesses with 225 or fewer employees that have at least 75 percent of their workforce based in the state.

As for special services, such as academic technology transfers, New Jersey needs to improve. According to a recent report on the state's biosciences industry by Prosperity New Jersey, a partnership between private business and the state government, New Jersey's research institutions have "insufficient technology transfer programs" and companies have limited access to specialized research facilities. "New Jersey's university technology transfer offices do not provide entrepreneurs with adequate business contacts or advice," the study noted.       www.njeda.com



Pennsylvania
Life Sciences, a Keystone Industry

Last year, pharmaceuticals, biotech, and healthcare accounted for 11 percent of Pennsylvania's total employment base, one of the highest such concentrations in the nation, according to the Pennsylvania Biotechnology Association. The total number of life science companies in the state in Q1 2002 was 133, ranging from large pharmaceuticals manufacturers to small biotechs. Total employment within the bioscience industry in Pennsylvania is 35,593, according to the state's Department of Labor and Industry.

Pennsylvania
· 35,593 bioscience jobs
· $1.6-billion state biotech investment
· 3 life science greenhouses
The state government began investing $1.6 billion in life science and biomedical research last year. This is being distributed to Pennsylvania-based research institutions (approximately $64 million per annum for 25 years), including $100 million in fiscal 2002 for the initiation of three life science greenhouses; $60 million for venture capital funding to support commercialization of demonstrated new life science business opportunities; and $140 million in projected leveraged funds for the venture capital fund. Also funded were Work Force Leadership Grants totaling $1.5 million.

The state awarded Customized Job Training Grants totaling $1.7 million to four bio/pharma companies, and will provide net operating loss tax credits of $7 million and job creation tax credits of $3.9 million to bio/pharma companies between 2002 and 2003.

The main organization overseeing the biotech industry is the Pennsylvania Biotechnology Association, which guides public policy on biotech, provides intellectual, networking, and commercial opportunities for members, and serves as an educational resource to advance the public's understanding of biotech.       www.inventpa.com



Also Online

More on Northeast research centers, trade groups, and sources of funding. 


> Mid-Atlantic/Southeast Region 





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