Friday, June 27, 2008

Opportunities and challenges face biotech companies outside of Boston

By Lucy Caldwell-Stair, Special to Mass High Tech

Shiny new laboratories perched on freshly developed meadows are the faces of New England’s regional biotech clusters. Many miles away from Cambridge-Boston’s super cluster, these facilities — some filled and some looking for tenants — promise to invigorate the local economies of Springfield and Amherst, Mass.; Portland, Maine; southern New Hampshire; and the university towns of Connecticut.

Now the regions are banding together to form an umbrella association of state biotech trade associations and pharmaceuticals that aim to educate policy-makers on the need for more funds for lab space, workforce training and economic incentives. The as-yet-unnamed group is being organized by Amgen Inc. and the Biotechnology Industry Organization (BIO), according to one of the organizers, Gary Goodrich, CEO of BioProcessing Inc. in Portland, who is also a board member of the Biotechnology Association of Maine.

About 20 of Maine’s 100 biotechs are established companies making finished products and components, according to Goodrich.

“They’re doing well, with 10-to-30 percent growth rates,” Goodrich said. “One nice thing about these small and growing companies is that most are quite stable.”

While Maine’s biotechs tend to be stable, they also face challenges. Goodrich competes for employees with veterinary products maker Idexx Laboratories (Nasdaq: IDXX) in Westbrook, employing more than 1,000 people in the Portland area.

“What’s hard is finding people at the upper levels. For lower levels, there are enough University of Maine graduates in chemistry and immunology,” he said, citing the challenge of getting executives to relocate to Maine.
In New Hampshire, one challenge is finding skilled labor. Fred Kocher, head of the New Hampshire High Technology Council, said the council is lobbying for biomanufacturing-oriented education in the public schools and is pushing for a more rigorous and relevant curriculum.

“We see a big squeeze for tech companies. The average 60-year-old in New Hampshire has more education than the average 30-year-old. We’re left having to talk retiring baby-boom engineers into staying,” Kocher said.

Another problem affecting New Hampshire and Maine is that few venture capitalists operate there. Biotechs in the northern states are left with the slower pace of self-funding or a few angel investors. Even when venture investors back a startup, they sometimes take the company — and its jobs — to the Boston-Worcester area to be closer to their other portfolio companies, said Goodrich.

Like biotech clusters throughout New England, Maine is expanding laboratory space, even though the 5-year-old Biotechnology Center of Maine in midstate Fairfield “hasn’t (yet) been that successful in bringing in biotech,” Goodrich said.

“In Portland, we’re planning a regional biotech business park with labs and manufacturing. We’re in schematic design and hope to begin construction within a year,” said Nell Hanig, business development representative for the city’s economic development office.

In Western Massachusetts, the town of Amherst has stepped into the biotech game. Hoping to attract biotech startups into the tax base after they step out of the University of Massachusetts Amherst campus, town manager Larry Shaffer and his staff are negotiating to buy a 140-acre farm, where the town would add infrastructure and sell to a developer.

“We’ve never done anything like this before.  Municipalities have stayed out of the day-in, day-out issues of community development, but if we wish to change the dynamic, we have to get more involved,” said Shaffer.

Another new incubator is housed at the Pioneer Valley Life Sciences Institute in Springfield. The 15,000-square-foot space is engineered for wet and dry labs, said David Miller, PVLSI’s first business development director. Hired in January, his goal is to drive biotech development in Western Massachusetts.

PVLSI joins University of Massachusetts researchers with Baystate Medical Center’s clinical specialists. Seven principal investigators are at work “taking research from the bench to the bedside,” said Miller. He expects growth from other avenues, too. “With incubators, many of the tenants are spinoffs of existing companies and entrepreneurs that come out of the woodwork,” he said.  Instead of venture capitalists, in Springfield “there are quite a few angel investors in the area, and perhaps they are better suited,” he said.

Miller looks to the Worcester area as a model for Springfield, noting that biotech development started more than 20 years and has created over 2,000 jobs. “I’m an optimist. If we pull in companies with great potential, seasoned professions will want to participate,” he said.

The University of Connecticut, for its part, is constructing a new building with a 6,100-square-foot stem cell incubator to be completed in 2009. The new space will be co-located with stem research core labs with access to UConn’s other specialized equipment.

The university’s three incubators house 15 startups in about 105,000 square feet of total space, said UConn’s technology incubation program director Rita Zangari.

Space is tight at the Dartmouth Entrepreneurial Network’s bulging 32,000-square-foot incubator in Hanover, N.H. Quickly filled with nine tenants shortly after opening in September 2006, the center has long-term plans to add another 28,000 square feet. For now, manager Greg Fairbrothers is putting people “in the hallways, conference rooms, and next, we’ll put people on the ceilings.”

 

Lucy Caldwell-Stair is a freelance writer in Newton.