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Competing for biotechs' attention

States, nations chase prospect of high-paying jobs, revenue

Email|Print|Single Page| Text size + By Todd Wallack
Globe Staff / June 19, 2008

SAN DIEGO - Georgia hosted biotechnology executives aboard an aircraft carrier. Nebraska plied them with Omaha Steaks. And Hawaii offered tropical drinks, island music, and hula lessons.

Everywhere you look at the world's biggest biotech show here this week, politicians and economic development officials are fighting for the attention of industry executives. At least a dozen governors planned to attend the Biotechnology Industry Organization show. The convention floor is crowded with more than 60 pavilions run by states, nations, and regions, ranging from Oklahoma to Spain.

"They want what we've got," said Massachusetts Governor Deval L. Patrick, who is leading a brigade of four dozen state and local officials at BIO in an attempt to persuade biotech executives to expand in Massachusetts.

The scene at the convention - organizers call it the "Olympics" of the biotech industry - underscores the growing competition that Massachusetts faces to remain a leader in the industry. Once regarded as an obscure niche, biotech has gradually become big business, prompting economic boosters worldwide to salivate over its high-paying jobs, growth potential, and promise to inject new money into a local economy.

"Biotech is one of the hot industries that every economic development board pays attention to," said Glen Giovannetti, who runs Ernst & Young's biotech center in Boston.

Indeed, Florida estimated it has invested at least a half billion dollars in the life sciences industry in the past few years, mostly to help set up top research institutions, like the Max Planck Institute of Bio-Imaging. Maryland unveiled its $1.1 billion life sciences proposal Monday, hours after Patrick signed Massachusetts $1 billion life sciences plan into law. And Georgia, home to the Centers for Disease Control and Prevention and several respected universities, has set aside millions of dollars for loans to life sciences companies and funding for start-ups.

"We intend to put Georgia on the [biotech] map," said Ken Stewart, commissioner of Georgia's Department of Economic Development.

But it is difficult for other states to compete with Cambridge's Kendall Square and San Francisco's Bay Area, especially if they are trying to build an industry from scratch. Both areas have deep roots in the industry. The commercial biotech revolution arguably began in 1976 with the founding of Genentech Inc., a south San Francisco biotech giant. Cambridge-based Biogen (now Biogen Idec Inc.) launched just two years later.

Today, the Bay Area has 77 publicly traded biotech companies, more than any other region, according to a recent study by Ernst & Young. Massachusetts is close behind with 62.

But other areas are gaining ground. San Diego now has 42 publicly traded companies, up 50 percent from just five years ago. In fact, San Diego biotech companies actually raised more venture capital money than those in Massachusetts last year. Venture funding for San Diego companies leaped 135 percent to $966 million from 2002 to 2007, compared to a respectable 66 percent for Silicon Valley, and 47 percent for New England, according to data collected by Thomson Financial, PricewaterhouseCoopers, and the National Venture Capital Association.

"San Diego is up and coming," said James Connolly, who leads PricewaterhouseCooper's life sciences practice in Boston. "It may be the fastest growing of the largest biotech clusters."

All three also face competition from abroad, including Ireland, Singapore, and China. Swiss drug maker Novartis AG, for instance, decided late last year to build a drug manufacturing plant in Singapore, after initially considering Massachusetts as one of several potential sites.

"I think our ability to attract and retain the best and brightest talent in the world is being challenged by other parts of the world," said Matthew Gardner, president of BayBio, which represents Northern California's life sciences industry.

California and Massachusetts are also battling with each other. California Governor Arnold Schwarzenegger talked up the state's biotech industry during yesterday's keynote speech at BIO, boasting about top research centers, tax credits, that state's existing base of biotech companies, and a $3 billion investment in stem cell research. "This is more than any nation in the world is doing," Schwarzenegger said.

But Massachusetts House Speaker Salvatore DiMasi said Patrick "blocked Schwarzenegger's jump shot" with his $1 billion initiative, which provides money for a broader range of life sciences research and companies than does California.

Despite the increased competition, Massachusetts' bio cluster has continued to grow. A PricewaterhouseCoopers study released last week estimated life sciences employment in the state climbed 8 percent from 2001 to 2006, to 77,000 workers, even as other industries shrank. The report also said Massachusetts generates more life sciences patents and doctorates per resident than any other state. In addition, it received more funding from the National Institutes of Health per capita than any other state. The report was sponsored by the New England HealthCare Institute, Massachusetts Technology Collaborative, and the Massachusetts Life Sciences Center.

Todd Wallack can be reached at twallack@globe.com.

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