Colorado poised as hub for biotech research – Drug innovations putting Utah on industry’s map

But drug production not likely to settle here, study suggests

Colorado is poised as a regional center for biotechnology research and development but likely won’t become home to large-scale manufacturing, sales or marketing forces, according to a study by the Milken Institute, an independent economic think tank.

By Rachel Brand, Rocky Mountain News

http://www.insidedenver.com/drmn/technology/article/0,1299,DRMN_49_3250030,00.html

The study, a broad survey of the biotech and pharmaceutical industries and their economic impact, ranks each state according to venture investment, funding, work-force productivity and other measures.

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Colorado and Utah "have a very similar profile. They’re very strong in basic research and development and thin on pharmaceutical manufacturing," said Perry Wong, a senior research economist at the Santa Monica, Calif.-based Milken Institute.

"There’s not really a chance of getting into production," he said.

The state is too far from large chemical companies, he said, and the "bottom line, for a large pharmaceutical-like manufacturing (company) in that region, is going to be expensive."

Colorado’s future may lie in small-scale biotechnology manufacturing, which tends to be cleaner and smaller, he said.

"Maybe some 20 years down the line, we have an Amgen there," he said. "I don’t mean to say there’s no chance. The state is growing and expanding but not in the same scale or same orientation of others in Northeast states."

As a result, workers’ average incomes here lag the national average: $41,000 vs. $72,000.

Colorado is among 40 states angling economic development initiatives toward life sciences this year, according to the Battelle Memorial Institute, a Columbus, Ohio-based technology research and development group.

That includes transforming the former Fitzsimons Army Medical Center into a medical research and bioscience hub.

The study was presented Tuesday morning by Milken and the Pharmaceutical Research and Manufacturers of America, a trade group that underwrote the study.

The Milken Institute, endowed by former junk-bond king Michael Milken, studies market-oriented ideas in technology, health care and finance.

The report said pharmaceuticals are most concentrated in the New Jersey-New York corridor, while biotechnology is centered in San Francisco; San Diego; Seattle; Boston; Raleigh- Durham, N.C.; and New York.

The institute developed a new measure, dubbed the "Biopharmaceutical Innovation Pipeline Index," to measure how a state can generate future economic activity from its current resources. Each measurement is adjusted for the state’s size.

Colorado ranked ninth overall and among the top 10 states for work-force readiness, venture capital investment, and output as measured by new drugs, clinical trials, patents and other indicators.

In the fourth component, government research, the state ranked 13th. That component measures how many grants the state receives from the National Institutes of Health, National Science Foundation and Small Business Administration.

"That (ranking) is really driven by the University of Colorado," said Tom Clark, executive vice president of Metro Denver Economic Development Corp. "For the public universities, it ranks No. 1 in NIH funding. That’s an admirable but often tenuous position given the fact that it requires state matching dollars."

Massachusetts, home to a bevy of biotech startups and world-renowned universities, ranked first. It was followed by Maryland, New Jersey, Pennsylvania and Connecticut – rich in old-line pharmaceutical companies, clinical research organizations and drug-oriented media.

The study found Colorado slightly below average for job growth.

Nationwide, employment in the biopharmaceutical industry is projected to grow to 536,300 in 2014, an increase of 29.6 percent from 413,800 this year.

Biopharmaceutical employment in Colorado is expected to grow 24 percent in the next 10 years to 6,387 workers. The number includes researchers, manufacturing line workers, and pharmaceutical sales reps who reside in Colorado and work for companies headquartered elsewhere.

Jobs will arrive slowly because companies tend to hire fewer researchers than sales, marketing or manufacturing employees, Wong said.

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Drug innovations putting Utah on industry’s map

By Brice Wallace
Deseret Morning News

http://deseretnews.com/dn/view/0,1249,595097849,00.html

The biopharmaceutical industry in Utah packs a much bigger economic wallop than it did a decade ago, and that growth is expected to continue for the next 10 years.

A national industry study conducted by the economic think tank Milken Institute and based primarily on government data shows that the number of biopharm workers in Utah totals more than 5,200 — up more than 3,000 since 1993. That compares with a nonetheless sturdy national average jump of 28.1 percent during the same period.

And the industry’s output — an estimate of the market value of goods or services produced — grew 250 percent in Utah during that time, outpacing the national growth of 77.3 percent, the study indicates.

That, plus the projection that Utah’s biopharm industry will add more than 3,000 direct jobs and nearly 10,000 more related jobs in the next 10 years, has helped position Utah as a prominent player in the sector.

"There are many states in this country, many states that a lot of us didn’t consider as centers for biopharmaceutical research, that are striving to get there. Utah is a great example," Lori Reilly, deputy vice president for policy at the Pharmaceutical Research and Manufacturers of America, said at a Tuesday news conference regarding the study. PhRMA was one of the study’s sponsors.

In fact, during an interview with a Massachusetts radio station Tuesday morning, the radio hosts were surprised to find Utah highly ranked in the industry. "The folks in Massachusetts hadn’t really thought about Utah in that way. . . . I think Utah should be quite proud of their numbers and the work that has been done to get there," she said.

Brian Moss, president of the Utah Life Science Association, said the state was 11th in a ranking of the industry’s "innovation pipeline," referring to measures of research, financial and human capital infrastructure.

"Little Utah, out here tucked away in the Rocky Mountains, rates with the big boys when it comes to innovation, and that is something we have always stressed," he said.

"It’s extremely high," Reilly said of the 11th-place ranking. "It’s right up there with states like Massachusetts, Maryland and Pennsylvania — states that many people assume are the real epicenters of biopharmaceutical research. They certainly are, but Utah is becoming one of those states as well, and that’s certainly something to definitely be proud of."

But as happy as people at the news conference were about the state’s historic growth, they spoke in glowing terms about the future. For example, they cited Pennsylvania-based Cephalon, which will move its Utah operations to larger facilities as it produces several products, including the hallmark Actiq lollipop-like method to deliver powerful medicine to help cancer victims deal with "breakthrough" cancer pain.

"Cephalon is glad to be part of the good news and glad to be part of Utah," said Mike Barr, general manager of the Salt Lake facility.

Moss noted that Utah’s biopharm industry is expected to have 8,370 workers by 2014. With ripple effects on other industries, the job-growth figure is projected at 35,130.

"This is very significant. These are not entry-level jobs," he said. "These are jobs that pay very significantly higher than the state average and the national average, as well, in terms of the employee benefits."

Robin Riggs, vice president of the Salt Lake Chamber, also spoke of future opportunities.

"The Salt Lake Chamber believes that our research centers and world-class research institutions, such as the University of Utah and Utah State University, and affiliated resources, such as the medical center and Huntsman Cancer Institute, are huge economic engines that, if properly leveraged, can create unparalleled economic growth in this state," Riggs said.

Dr. Stephen Prescott predicts a bright future for the use of biotech to create treatments, the basis of the term biopharmaceuticals.

"We are creating an environment that allows this industry to thrive," said Prescott, executive director of the Huntsman Cancer Institute.

But he noted that that environment must be rich in collaborations and partnerships from different players. The communities that traditionally have dominated the field, such as San Diego and San Francisco, he said, have universities and other research institutes working closely with private companies, medical researchers and others to develop treatments that impact lives.

And he believes that Utah’s genealogical research, combined with databases of information, will add a "unique element" to the state’s strength in the field.

Predicting future growth in the industry is a "tough nut," said Kim Wheelwright, vice president of Ogden’s Pro-Pac Labs, one of the companies cited in the report as contributing to the state’s strong showing. Pro-Pac manufactures nutritional supplements for other companies, meeting their specifications.

"Not everyone in this industry sees future growth." It’s clear, he said, that companies in the industry will either continue to try to improve how they do things and raise the entire industry to the next level, or they will become history. "There’s beginning to be a division" separating companies willing to spend the money and the effort to do things right and meet new suggested standards.

Alan Dayton, acting Salt Lake County mayor, said he was "astounded" at the $330 million direct economic impact of the biopharm industry in Utah during 2003, but he was more impressed with various multiplier effects on the economy.

"Salt Lake County has a role in economic development, and I’d like to speak on behalf of all of government that our role is either to speed up or get out of the way," Dayton said. "We have an obligation to help create an environment where businesses can thrive and grow."

Moss noted that pharmaceutical companies, their development and growth has led to some negative publicity.

"It’s very important that we all understand both sides of the story, and this is the other side of the story: great jobs, great employment, great opportunity, great products. And it’s important that whatever we do in the political spectrum, we don’t cut off that opportunity to grow and develop the new products which are the lifesaving products of tomorrow," he said.

"We’re just at the beginning edge of what can happen in our science and our development and our great universities, and it’s important that we keep that engine of growth going, no matter what we do in the rest of the pharma discussion. We’ve got to keep that growth engine going."

Contributing: Lois Collins E-mail: [email protected]