[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
[SANET-MG] biotech bad idea virus
From GM watch
States, cities court biotech, but is it worth it?
June 09. 2004 5:06PM
By PAUL ELIAS
AP Biotechnology Writer
Governors and mayors from across the country were in full force at the
biotech industry's annual convention this week, offering tax breaks,
government grants - even help with parking - to lure biotech companies.
Yet biotech remains a money-losing, niche industry firmly rooted in
three small regions of the country.
"This notion that you lure biotech to your community to save its economy
is laughable," said Joseph Cortright, a Portland, Ore. economist who
co-wrote a report on the subject. "This is a bad-idea virus that has
swept through governors, mayors and economic development officials."
Cortright said the biotechnology industry is largely concentrated in the
San Francisco Bay Area, San Diego and Boston because of the built-in
venture capital communities, vibrant academic institutions and highly
educated work forces in those regions. Research Triangle, N.C. and
Seattle also have a significant number of biotech companies, but nothing
compared to the top three areas.
What's more, biotechnology companies like to "cluster" around
universities and each other so they can easily swap - and steal -
technology and scientists, making it difficult for regions to launch a
biotechnology industry from scratch, Cortright said.
That hasn't stopped state and local officials from dreaming that the
growing biotechnology industry will help shore up their sagging
economies with high-paying jobs while adding luster to their communities
with cutting-edge research aimed at curing cancer, AIDS and other
"It's always good to have skeptics, but I like to be on the dreaming
side," said Florida Gov. Jeb Bush, who has made one of the biggest - and
riskiest - moves to lure biotech to a state noted more for tourism and
oranges than medical breakthroughs. "It's a lot more fun on the dreaming
side of the road."
Florida and Palm Beach County have invested a combined $510 million to
build a new biotechnology center for the prestigious Scripps Research
Institute, based in San Diego. Bush and other Florida officials hope
that Scripps' large influence on making San Diego a biotech hub will be
duplicated in Florida.
"At minimum, there has been a paradigm shift in the thinking about
Florida," Bush said.
According to a report prepared for the Biotechnology Industry
Organization and released at its annual convention in San Francisco this
week, at least 29 states have formal plans to woo the biotechnology
industry and many, like Pennsylvania, are using money gained from the
global tobacco settlement to fund biotechnology development projects.
Six governors made the trek here and dozens of states and cities have
colorful booths on the convention floor.
Arizona sent 60 representatives to the convention to tout its
government-backed biotech initiatives. In 2002, the state provided $30
million and the city of Phoenix donated land worth $21 million to build
the Translational Genomics Research Institute, according to the report.
The report, which included medical device makers and some
chemical-making sectors not generally viewed as biotechnology, found
industry jobs pay $26,600 more than the nationwide average.
There's no doubt biotechnology is growing and many analysts do see the
genetically engineered, cell-based medicines someday eclipsing the
traditional, chemical-based way most of today's drugs are made. But even
the most optimistic outlooks don't see that occurring for another 10 years.
That's because for all its promise, the biotechnology industry has lost
a combined $40 billion since its inception in 1976.
Combined annual revenues are about $30 billion, the same amount
pharmaceutical maker Pfizer Inc. took in last year.
The combined market capitalization of publicly traded biotechnology
companies is about $300 billion, slightly more than the value of
Microsoft's publicly traded shares.
"You're talking about a couple decades' investment," said Jim Hall, a
Boston-based analyst with the Scottish firm Wood MacKenzie Consultants.
"Biotechnology companies still have a long way to go in terms of profits
In all, biotechnology employs about 200,000 people nationwide, but
ironically only one very small biotechnology company actually is based
in the city of San Francisco, which takes credit for launching the
industry because much of the pioneering work was done at the University
of California, San Francisco.
"We are frustrated," San Francisco Mayor Gavin Newsom told biotechnology
executives during a lunchtime speech Monday at the industry convention.
"You need parking requirement changes, we'll take care of it. You need
tax incentives? You got it," Newsom told the executives. "Whatever you
To unsubscribe from SANET-MG:
1- Visit http://lists.sare.org/archives/sanet-mg.html to unsubscribe or;
2- Send a message to <firstname.lastname@example.org> from the address subscribed to the list. Type "unsubscribe sanet-mg" in the body of the message.
Visit the SANET-MG archives at: http://lists.sare.org/archives/sanet-mg.html.
Questions? Visit http://www.sare.org/about/sanetFAQ.htm.
For more information on grants and other resources available through the SARE program, please visit http://www.sare.org.