Biotech Rising

While housing woes, retail slumps and layoffs dominate the nightly news, a small segment of the national and state economies has been ramping up-biotech.

There's been plenty of talk about the strength of the health-care market, which in turn is fueling massive growth in biotech and bioscience businesses. Biotech is seen by many states as an economic golden egg and many are stepping up efforts to woo biotech companies.

And it's little wonder why. The average bioscience job paid $71,000 in 2006, $29,000 more than the average private sector job. Each bioscience job generates an additional 5.8 jobs in the national economy, according to the Biotechnology Industry Organization. Between 2001 and 2006, the number of bioscience companies grew 15.7 percent to 42,910 establishments nationally.

Total U.S. employment in the biosciences reached 1.3 million nationally in 2006, up from 1.2 million in 2004, led by strong growth in the research, testing, and medical lab subsector, which experienced a 17.8 percent increase in employment and a 32.7 percent increase in establishments between 2001 and 2006, according to the Biotechnology Industry Organization's report, Technology, Talent and Capital: State Bioscience Initiatives 2008.

New Hampshire has its own biotech success stories. After only six years in business, GlycoFi, a Lebanon-based developer of protein optimization technology, was acquired by Merck for $400 million. In 2007, Lonza Biologics in Portsmouth launched a $300 million expansion and expects to increase the number of workers there by 350, according to the Biotechnology Industry Organization's report. (It already employs about 675 and is among the state's largest manufacturing employers.) Stryker Biotech recently completed a $100 million expansion of its West Lebanon facility. In 2006, venture capital investments in bioscience-related NH companies reached $71.4 million, up from $22.1 million in 2002.

Feathering a Biotech Nest
While biotechnology is still seen as a relatively young industry, NH has been attracting industry players for a while. Paula Newton, president of the NH Biotechnology Council, notes that one of the oldest biotechnology companies in the country, Verax (now a business of Stryker Biotech), started at Dartmouth College more than 30 years ago. As the biotech industry is seen as recession-proof and demand for biotech products is only expected to grow, particularly as boomers begin entering retirement age, competition among states for these businesses is fierce, Newton says.

In addition to pushing its tax advantages, NH has recently taken steps to make the state an attractive place for businesses to relocate. In its report, the Biotechnology Industry Organization highlights NH's passage of legislation in 2007 to re-establish a research and development tax credit to encourage innovative companies to create jobs. Firms can receive up to 5 percent of the business enterprise tax due for qualified research and development expenditures. The Legislature designated $1 million annually for the next five years to fund the tax credits. The Legislature also reinstated NH's Job Training Fund in 2007, providing up to $1 million in matching funds in 2008 to train new or existing workers. The report cites that several bioscience companies have received grants.

The report also highlights the Eastern Region Partnership, an education and business partnership that works with school districts, colleges and universities and the industry to create a career pathway for biotechnology and health science careers. The state appropriated $680,000 for the Granite State Technology Innovation Grant Program for both FY 2007 and FY 2008, which funds business-university collaborative research projects.

Research and development incentives are important carrots to dangle, as R&D is the lifeblood of the biotech industry. New Hampshire has an employment specialization in medical devices and equipment, which is also growing faster than the national sector. Academic bioscience research expenditures in 2006 were $165 million, of which $135 million was in medical sciences. In the past six years, $192 million in bioscience venture capital was invested. Surgical and medical equipment accounted for more than 40 percent of the 644 bioscience patents granted in the same period, according to the Biotechnology Industry Organization's report.

The NH Biotechnology Council wants to see states working cooperatively to develop more biotech incubator space across the Northeast.Commercialized biotech products really need to be surrounded by the academic and R&D elements, so an entire Northeast Corridor incubator with lab space, equipment and interpersonal support is key to our success, Newton says.

However, NH also needs to step up efforts to stand out from the crowd. We need to continue to work on branding the state to stay on top, Newton says. The NH High Technology Council is working with the state on developing a plan to formally brand NH as a high tech state.

Training Biotech Workers
In order to grow and attract biotech companies in the Granite State, it is essential to develop a workforce that can meet the industry's needs. In 2006, NH colleges and universities conferred 592 degrees in bioscience fields.
Dartmouth College's sway in both medical and biotech fields encourages investment in NH, as does the emerging capabilities at the University of New Hampshire. Great Bay Community College in Portsmouth offers a nationally recognized biotechnology program through the NH Biotechnology Education and Training Center. In addition to training the industry's future workforce, Great Bay trains hundreds of local employees through tailored industry workshops. Lonza trained more than 200 employees at Great Bay last year, and that's just one example, Newton says.

Players like Stryker, Lonza and GlycoFi are hiring as many available technicians as they can, straight out of community college associate degree and certificate programs in NH, says Sonia Wallman, chair of the biotech department at Great Bay and director of the Northeast Region Biomanufacturing Center and Collaborative, a regional alliance of community colleges working with government and the industry to prepare the biotech workforce. The rest of the nation looks to our region to find out which way to go in this field, Wallman says.

Co-written with MATTHEW J. MOWR.