Signs of Life The Biotech Industry in D'C'

1
Signs of LifeThe Biotech Industry in D.C.
Heike Mayer Alan Fogg Assistant
Professor Graduate Student Urban Affairs and
Planning Master of Urban and Virginia Tech
Alexandria Center Regional Planning
2
Roadmap

• Introduction to Biotech Industry
• Key Findings- Nation (Brookings Study 2002)-
  Regional update
• Key Lessons

3
Why Biotech?

• ? The next Silicon Valley
• ? The battle for the Dot.Coms
• ? Next Big Thing Biotech
• 83 of local development agenciesplace bio among
  their top two priorities
• 41 States have biotech programs
• ? Next next thing? Nanotech, Bio IT ?

4
Definitions Methods

• Biotechnology
• Firms using genetic and cellular techniques
• Biomedicine diagnostic/therapeutic
• Industry-developed definitions data
• Top 51 Metropolitan Areas
• Census-defined CMSA/PMSA list
• Triangulation of data sourcesResearch
  Commercialization

5
Industry Segmentation

• Pharmaceutical
• Very large, global firmsTop ten average 15
  bio sales
• Assets are products, distribution, manufacturing
  expertise
• Very profitable

Biotechnology Small, mostly single establishment
firmsTop ten average 700 mio sales Principal
assets are people, research and future
potential Lose money
6
Nine Metros Dominate
Seattle
Boston
New York Philadelphia
San Francisco
Why these nine?
Washington-Baltimore
Los Angeles
Research Triangle Park
San Diego
7
Pillars of Biotech Development

• NIH Grants
• Patents
• Venture Capital
• RD Partnerships
• Startup Firms
• Established Firms

Research
Commercialization
8
Leaders vs. the Pack
Average Levels of Activity
9
Research Dispersing
1980s 1990s NIH
63 59 Patents 71 68
Top 9 Centers Share
10
Commercialization Concentrating
1980s 1990s Venture Capital
81 86 RD Alliances 89 96 New Firms
61 77 Base data from
early to mid-1990s
Top 9 Centers Share
11
NIH Funding
Research Grants, 2000 (Millions)
3rd
12
Biotech Related Patents
Patents Awarded, 1990-1999
5th
13
Venture Capital
Investment, 1995-2001 (Millions)
9th
14
RD Alliances
Value of RD Alliances, 1996-2001 (Millions)
6th
15
Biotech Startups
New Biotech Firms Started Since 1990
6th
16
Established Biotech Companies
Firms with 100 or more employees
4th
17
Washington/Baltimore Cluster

• Research Assets
• Johns Hopkins, NIH
• Cadre of Biotech Firms
• Human Genome Sciences, Celera, Med-Immune,
  Alpharma, Genvec, Neurologic, Macrogenics
• Dozens of others in biotech related fields
• BIO National Industry Association

18
Washington/Baltimore Cluster

• Clearly among the top 9
• Very strong in research
• High levels of NIH funding
• High volume of patents
• Not as strong in commercialization
• 85 million in venture capital
• 17 million in RD alliances with big Pharma
• Heavily concentrated in Rockville-Gaithersburg

19
NIH Grant Awards
Millions of Dollars
20
NIH Grant Awards by Sub-Region
Millions of Dollars
21
NIH Grant Awards Virginia
Major recipient communities in Virginia Richmond
Charlottesville Blacksburg
22
Employment
Washington MSA Baltimore MSA
Note NAICS 54170 includes RD in Social Sciences
23
Number of Firms
Note Includes NAICS 3254 and NAICS 54170
(includes RD in Social Sciences)
24
VC Investment DC/Metroplex
Millions of Dollars
Maryland
D.C.
Virginia
25
(No Transcript)
26
(No Transcript)
27
Biotech initiatives Maryland

• University of Maryland, Baltimore, opens 300
  million BioPark
• East Baltimore Biotech Park (200 mio project
  will house 30 to 50 companies urban
  redevelopment)
• Baltimore Development Corp. opens two Emerging
  Technology Centers (one near JHU) for bio and IT
  companies
• University of Maryland College Park and
  University of Maryland Biotechnology Institute
  launch educational and research initiatives in
  nano-biotechnology and molecular bioprocessing
• Maryland Department of Business and Economic
  Development (DBED) and Technology Development
  Corporation (TEDCO) fund early-stage companies
• Townsend Capital of Towson launches a company to
  develop science- and technology-related projects
  with universities and health care systems

28
Biotech initiatives Virginia

• In Northern Virginia
• 500 million Howard Hughes Medical Institute
  campus (Janelia Farm) to open in Loudoun County
• Eli Lilly to open plant in Prince William County
• George Mason University awarded 25 million grant
  (largest in school history) from the National
  Institute of Allergy and Infectious Diseases for
  construction of a Regional Biocontainment
  Laboratory at its Prince William campus.
• George Mason and Italian institute sign a
  three-year agreement to develop proteomics
  research program to unveil cancer diagnostics and
  therapies
• And in Richmond
• Philip Morris USA to build 300 million research
  and development facility at the Virginia
  Biotechnology Research Park in Richmond

29
Lessons from this region

• The share of biotech employment in the overall
  economy is very small (1.5 )
• Biotech is heavily concentrated in MD
• Maryland ahead in commercialization
• Baltimore MSA may become a leader
• Strong pro-active economic development
  environment in MD
• D.C. and VA portion of metro need to focus on
  gaining in research, but even more so in
  commercialization
• Potential to link to other economic strengths
  (such as homeland security, IT, telco, etc.)??

30
General lessons

• Biotech tends to cluster (even sub-regionally)
• Leaders have an edge (commercialization)
• Entrepreneurship VC are key- Entrepreneurial
  researchers- Industry-relevant talent- VC
• Bottom 42 -gt hard to catch up
• Modest payoff- No biotech firm among 25 largest
  employers- Averages about 3.5 of manufacturing
  empl.- Most firms stay small

31
Thank You!

• Questions, Comments, Suggestions
• Heike Mayer
• Virginia Tech
• Phone [phone]
• E-Mail heikem_at_vt.edu
• Brookings Publication
• Cortright, J., Mayer, H. (2002). Signs of life
  The growth of biotechnology centers in the U.S.
  Washington DC The Brookings Institution.
• Link www.brookings.edu/es/urban/publications/biot
  ech1.pdf