April 2007

Volume 30, Number 4  
April 2007  

Council Study Shows Huge Impact of Biopharma Alliances Education Initiative Fine Tunes Priorities

On April 11, the Massachusetts High Technology Council released a study showing that Massachusetts biotechnology and pharmaceutical employers benefit from unprecedented financial and research collaboration. However, the good news comes with a caveat: fierce competition from other states threatens future growth and drug discovery. The report, A Critical Alliance: The Biotechnology & Pharmaceutical Industries in Massachusetts, was prepared by the Donahue Institute at the University of Massachusetts and released at the State House before the Legislature's Biotechnology Caucus.

The study revealed deep connections between biotechnology and pharmaceutical employers, disclosing that from 2000-2006, 13 of the leading pharmaceutical firms created 357 alliances with state biotech companies worth up to $28 billion- far outpacing the amount of annual venture capital investment in Massachusetts biotech firms. The study also revealed that biopharmaceutical investment typically occurs during the critical early stages of drug development when many drugs fail due to lack of funding.

"The study clearly shows the remarkable amount of collaboration - and interdependence - between biotechnology and biopharma companies in Massachusetts," said MHTC President Christopher R. Anderson. "It is important that policymakers recognize the unintended negative consequences of certain policies - like imposing pharmaceutical price controls - will have on Massachusetts biotech employers and drug discovery. Quite simply, to be pro-biotech we must also work to support biopharma employers."

Biopharma Alliances Total $14.6 Billion in Investment

Donahue studied a sample section of 13 leading pharmaceutical firms - including Abbott Labs, AstraZeneca, BiogenIdec and Genzyme - that have created 357 Massachusetts alliances currently worth $13.4 billion. In addition, nearly half of these alliances occurred during the early stages of discovery or preclinical research when resources are most scarce. Donahue also estimates that the alliances hold an additional $14.6 billion in additional downstream value.

Caucus Co-chairs Hart, Rodrigues Show Support for Biopharma

"The Biotech Legislative Caucus must ask questions to understand why biopharmaceutical jobs are growing faster in other states," said Representative Michael Rodrigues, co-chair of the Biotechnology Caucus. "There is a commitment on behalf of the Legislature and the administration to do whatever we can to help these companies grow and prosper. This study provides a road map to help us reach our full potential for life sciences growth." Rodrigues and Senate Biotechnology Caucus co- chair, Senator Jack Hart, hosted the event and led a discussion on the report and other relevant economic issues.

Mass Biopharma Growing, Competitors Gaining

The study also provided a snapshot of the progress the state's biopharmaceutical sector has made in recent years. It concludes that Massachusetts is still a leader in biotechnology research and development, but that aggressive strategies by competitor states were eroding the state's leadership position.

Some specific economic development findings include:

• The Massachusetts biopharmaceutical sector experienced 44% job growth (from 33,619 to 48,242 jobs) from 1998-2004, but competitor states and the nation as a whole (57%) added biopharma jobs at much higher rates. Overall, Massachusetts slipped from fifth to seventh in total biopharma employment.
• Massachusetts has the highest wages per worker of any state at more than $98,000 annually, $8000 above second ranked New Jersey and 25% above the national average.
• Massachusetts more than doubled the amount of venture capital investment received by state biotech firms from 1998-2004 and at $561 million is a strong second to California. However, other states and the national average grew at higher rates than Massachusetts.
• Massachusetts nearly doubled the amount of National Institutes of Health (NIH) medical research grants up to $2.27 million in 2004. But many competitor states experienced higher rates of growth in critical NIH funding.

Hennessy: Mass. is Premier Biopharma R&D Center

"With a skilled workforce and world-class research facilities, Massachusetts is one of the premier centers of biopharmaceutical research and development," said John Hennessy, Executive Director & General Manager, Boston R&D, AstraZeneca, who addressed the Biotech Caucus. "Those resources attract global biopharmaceutical companies, like AstraZeneca, creating jobs and critical links to Massachusetts biotech companies."

The Donahue researchers conducted a survey of some of the state's leading biopharmaceutical employers to determine the business conditions of the state. The survey results showed that despite an availability of skilled workers and proximity to world- class research partners, Massachusetts, in comparison to other states, was not always effective in meeting business needs.

Biopharma Execs: Permitting Reform, Stable Cost Structure a Priority

The executives polled in the report cited burdensome business regulations and protracted state and local permitting processes, despite the significant permitting reform efforts of the Legislature and state government in recent years. Many executives felt that the state's business cost structure should be more stable and predictable and challenged the state to improve the pipeline of science and technology employees graduating from its public education system.

"The report clearly finds that the Commonwealth's historic science and technology strengths have made it a global Biopharma leader. It also identifies clear challenges facing Massachusetts if it is to retain and grow this critical industry in the years ahead," said Eric Nakajima, Donahue Senior Research Manager and study co-author. "To remain competitive, Massachusetts needs to develop its life sciences workforce pipeline, advocate vigorously for increased federal support for research and development and continue to proactively support the industry's expansion needs."

Donahue Helps Define Another Critical Technology Cluster

The Donahue Institute biopharma report was not the first time the Council teamed up with the University of Massachusetts' research and economic development arm. Back in 2005, the Council, through the Massachusetts Defense Technology Initiative (MassDTI), commissioned Donahue to study the economic impact of the state's two top technical military installations: Hanscom Air Force Base in Bedford and the Natick Soldier System Center.

The study, designed to build local support for the bases during the federal Base Realignment and Closure (BRAC) process, showed that the bases contributed more than 33,000 jobs and $3.3 billion in economic impact to the Commonwealth. The report provided the rationale for the state Legislature to approve financial support for $261 million in state capital funding for infrastructure improvements in and around the base. That state commitment helped reverse the perceptions that Massachusetts was unsupportive of the bases and Hanscom, in particular, did not have the capacity for new mission. The Pentagon recommended that new mission and more than 1,100 jobs be reassigned to Hanscom.

MHTC Leads Education Leadership Group

The Council's Education Leadership Initiative, co-chaired by Analog Devices Chairman Ray Stata and Genzyme Chairman & CEO Henri Termeer, on April 28 met at Genzyme's Kendall Square headquarters. With nearly 30 members, this broad-based, diverse group represents the Commonwealth's major K-12 education stakeholders, including the business community, state government leaders, administrators, teachers, superintendents and union leadership.

MHTC's 2007 CEO Survey results reinforced that K-12 education issues, and science, technology, engineering and math (STEM) in particular, are among the highest priorities for the state's technology community. The education leadership group is working to distill a broad education reform vision into a collaborative, executable strategy.

The strategy is a combination of short- and long-term programs empowering schools and districts to make infrastructure and administrative improvements or 'School and District Empowerment .' Additionally, it calls for a reevaluation and upgrade to current teacher training and preparedness or 'Educator Quality.'

In his role as Board of Education Chair, Council President Christopher Anderson has met individually with Governor Patrick to review the strategy and is in regular communication with the Governor's Education Advisor Dana Mohler-Faria, DOE Commissioner David Driscoll, and superintendents, principals, administrators and union leadership to coalesce support for the plan. The key provisions of the strategy include:

School and District Empowerment (Systems Change)

A comprehensive assessment of current practices is necessary to improve our education system. Many of the baseline elements that are common among all Massachusetts schools including length of school day, professional compensation, academic standards and evaluation, must be reexamined and modified. Several programs including improved STEM education practices, extended day and Pilot Schools, are currently being tested on a small scale to gauge success and readiness for statewide adoption.

Educator Quality (Capacity Building)

In order to ensure a world-class education system with a strong STEM focus, we must ensure that educators are experts in their fields, pedagogy and in preparing their students for careers in global innovation sectors.

The need for more teachers is evident, yet the process of becoming a teacher is unnecessarily bureaucratic. Teaching must become a more attractive option for top university students, particularly those pursuing math and science degrees, as well as mid-career professionals who are interested in teaching.

The Education Leadership Group is working to develop a statewide professional development plan to recruit the best possible teachers, provide mentors to new educators, and offer all educators the tools and support they need to be successful in the classroom.

The group meets regularly with plans for two additional meetings before the end of the school year to continue development of a recommended education strategy.

MassDTI Annual Meeting Features Hanscom, Natick Base Commanders

After a successful first year under its new mission to grow the state's defense technology economy, the Massachusetts Defense Technology Initiative will hold its inaugural annual meeting on May 10. The meeting, held on the grounds of the Natick Soldier Systems Center, will feature keynote addresses from Natick's commander, Brig. General Mark Brown and General Charles Johnson, base commander for Hanscom. For more information, please visit www.massdti.com or contact MassDTI Executive Director Alan Macdonald at (781) 890-0088 or al@massdti.com .

SAVE THE DATE

MHTC 30th Anniversary Dinner Celebration

October 23, 2007
Newton Marriott
Newton, Massachusetts

Additional details will be provided closer to the event.