11 Aug Regions On Rise: Life Sciences Across US
Julian Upton, Pharmaceutical Commerce
Exploring the competitive and unique offerings in three of the US’s lower-cost economic development regions—and how success in these areas has been boosted by COVID
A recent article in the Financial Times (July 7, 2022) discussed how New York was struggling to lure large-scale life sciences companies in the shadow of Boston, San Francisco, and San Diego, those “thriving” life sciences hubs that are “the envy of mayors and economic development planners.” New York City, bemoaned Joel Marcus of real estate firm Alexandria, is simply “too expensive to host large-scale life sciences companies.” The article countered though that after a “sluggish start,” the life sciences industry has “begun to percolate in NYC,” with a record 433,000 square feet leased to companies in the city in 2021. Nevertheless, it is interesting to note that even a commercial powerhouse like New York has a very long way to go before it can reach the heights of Boston–Cambridge, the San Francisco Bay Area, and San Diego, the biggest three life science clusters in the US.
With its cost of living, taxes, and premium real estate, New York may not yet present a viable alternative to those other high-profile areas, but there are other regions across the US that offer facilities, expertise, and talent on a par with the big clusters for a lot less capital outlay. Pharma Commerce looks at the some of the competitive offerings and unique life sciences opportunities in three such regions—Texas, Wisconsin, and Minneapolis–Saint Paul (MSP)—and reviews how success in these areas has been boosted by COVID-19.
Wisconsin’s biohealth sector is responsible for more than 47,000 jobs statewide, not including academic research institution and health systems jobs. The state is home to more than 1,800 biohealth companies. Wisconsin’s research universities are especially focused on bioscience, with $914 million allocated to bioscience academic R&D in 2016, accounting for more than two-thirds of all academic research at these institutions. Federal grants contribute over $1 billion in funding to Wisconsin’s economy each year, with the NIH supporting more than 900 grants in 2016. The University of Wisconsin system alone contributed more than 9,100 academic R&D projects that year.
On the manufacturing front, the Wisconsin Economic Development Corporation (WEDC) proudly asserts, “We build things in Wisconsin, and we’re good at it.” The state “excels in the manufacturing of diagnostics, molecules, cells, and tissues.” Active pharmaceutical ingredient (API) manufacturers such as Scientific Protein Labs, Alcami, MilliporeSigma, and Catalent are located in Wisconsin. The Waunakee-based Scientific Protein Labs is among the largest commercial suppliers of heparin sodium, a widely used anticoagulant to treat and prevent blood clots. Ongoing stem cell research at UW-Madison and its affiliated institutes has led to a concentration of medical and scientific instruments in 2018, making it the state’s third-largest export category, with 131 medical device manufacturers based in the area.
Wisconsin has a variety of incentives aimed at attracting businesses, promoting startups, and encouraging mature businesses to grow. These include new business venture tax credits for Wisconsin investors and technology development loans for startups; business development and enterprise zone refundable tax credits, which provide performance-based incentives for job creation and expansion, capital investment, and training; and an R&D credit that offers a refund of up to 15%. Wisconsin also exempts the purchase and use of machines and specific processing equipment, fuel and electricity, and qualified research and biotechnology equipment from state and local sales taxes.
“Apart from these financial incentives, our state has an effective and growing network of formal and informal organizations and partnerships to assist businesses in the life sciences, most notably BioForward Wisconsin,” Missy Hughes, secretary and CEO of WEDC, tells Pharma Commerce. BioForward Wisconsin’s 200-plus members include biohealth companies, research institutions, and healthcare organizations, from startups to larger, well-known companies such as GE Healthcare, Exact Sciences, Promega, and Illumina. To assist startups with their operational needs, the organization Forward BIOLABS offers co-working life science labs that are fully equipped, maintained, and come with concierge introductions, training, and networking. “This incubator enables organizations to begin their important work in the first week instead of the first year, because time isn’t spent leasing, designing, and setting up the lab,” says Hughes. “Their investment funding can go into product development, not lab development. Many companies have graduated from this shared lab space to become successful second-stage companies.”