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Ranking the Biopharma Clusters

I have a little trouble believing this consulting firm’s rank-ordering of the biggest concentrations for biotech firms. Boston/Cambridge is at the top, and to be honest, I don’t think the list would be credible at all if it weren’t, by this point. But the number two slot is the Research Triangle area, and while I think it might be nice if that were true – I’ve lived in the area, and know a lot of people there – I don’t see how it is. The folks at FierceBiotech seem to have their doubts, too. Next is the SF Bay area, then San Diego, then New York, LA, and Philadelphia. (Note that New Jersey and Long Island get their own slots, which probably affect some of the rankings).

Anyone down in North Carolina want to make the case, for or against? I’d hope for GSK’s ferocious downsizing to create some new companies, but after all, it was a ferocious downsizing in any event. . .

8 comments on “Ranking the Biopharma Clusters”

  1. Recently moved from RTP says:

    It looks like the survey is broader than VC funded biotech firms. It includes NIH-funded life science organizations, i.e. universities. If you factor in the mighty Duke Univ Medical Center, the University of North Carolina, NC State and Wake Forest University Medical Center, that’s a lot of university based medical research that employs lots of people and generates lots of patents, all metrics that were used in the survey.

  2. David says:

    Howdy, Derek, and congratulations on the move. I’m still down in Durham and have some insights. As alluded to in #1 by Recently moved from RTP, the criteria used by JLL to make these rankings included all life sciences companies, not just biopharma, and probably give the greatest reason for RTP’s seemingly high ranking.

    Life sciences employment concentration and growth
    Concentration of life sciences establishments in the market
    VC and NIH funding for local life sciences organizations
    Life sciences patents produced in 2014

    Indeed, we took a huge hit with the GSK job losses, with some of those who went to Parexel getting laid off a few months later. But ag biotech has really been exploding down here, especially with the nucleus provided by Novozymes, Bayer Crop Sciences, and BASF. RTI has also been very productive on the patent front together with the big research universities. I’m not so dialed into the VC landscape so I can’t comment there, but UNC-Chapel Hill and Duke put up $307 million and $279 million, respectively (not to recently moved from RTP: UNC came out higher than Duke), Those numbers put them at #7 and #10 in NIH funding among U.S. universities. NC State does well, but not with NIH funding; Wake Forest wouldn’t be considered RTP.

    Back when you were down here at Duke, Governor Hunt established the state-funded North Carolina Biotechnology Center to cultivate statewide development of the “biotech” industry. If you look at this list of the RTP area companies that fall under the huge life sciences umbrella, the ones in gray are the actual “biosciences” companies.

    So, perhaps it’s these broad criteria that contribute to RTP’s #2 ranking.

  3. DamnBiotech says:

    I’m midway through my PhD, thinking of the next steps. Are there any resources on biopharma clusters worldwide? I’m thinking of going abroad.

    (background is med chem and organic synthesis, PhD is cloning in E. coli, development and use of screening platforms and genetic libraries for initial hit discovery (SICLOPPS and phage display), hit assessment and improvement)

  4. AnotherDerek says:

    There is some funky math at work here. Chicago is listed at 17th, and Indianapolis at 16th – despite the fact that Chicago has significantly higher numbers in all three of their evaluation categories (# of Employees, # of Establishments, and # of Patents). This means that either: (1) someone made a mistake when calculating the final ranking, or (2) they developed some metric involving research output per employee or establishment and this metric influences the final ranking more than the three evaluation scores. I didn’t download the full report so cannot determine which.

  5. Sideline Chemist says:

    I suspect that the RTC ranking of “life science establishments” gets boosted by all of the biotech manufacturing plants in the area. For example, Biogen has had a large manufacturing center in the RTC for years and has been greatly expanding it lately. Bunch of other CRO manufacturing groups that would also fall under “life science establishments”. I would agree that biopharma research in the RTC has been on the decline for years, but the area still has a big presence in the development and manufacturing side which is reflected in the ratio of “# of establishments” to patents (2112:259 for RTC vs 1895:1879 for Boston)

    Although we scientists love to think that discovery research is the king of biotech/biopharma, in reality the development/manufacturing/regulatory/sales side of the business is of far more immediate concern to Wall Street and the Ivory Towers of Upper Management.

  6. BNCinRTP says:

    I moved to RTP in 2000… The biotech/pharma industry has been on the decline ever since… The actual discovery and development engines in the greater Research Triangle Park (RTP by the way), North Carolina area is fast approaching zero… The likes of Trevena (Duke professor, Nobel Laureate) and Epizyme (UNC Chapel Hill technology) chose to leave the area years ago to Philly and Cambridge, respectively. Its clear as day that as go the VC clusters, so too follow the start-ups in search for cash… Its quite sad to see the once powerful discovery and development organizations in RTP close up shop, start-up elsewhere or sell off assets after phase I for a bit more than a song… There’s no way on earth it outranks anywhere on the West Coast (SF, SD, Seattle in particular) and I’d venture to say that even places like Houston have more going on in actual private/public company arenas… RIP RTP I suppose…

  7. TimmyG says:

    At first glance this didn’t seem right to me, but I looked at the math (from the FierceBiotech article):

    “The key factors for a top ranking centered on the concentration of biotech employment in the metro area (with a 25% weighting) followed by VC funding (20%), NIH funding (20%), life sciences patents (15%), the concentration of life sciences establishments (10%) and employment growth (10%).”

    It seems the JLL survey is oriented towards headcount (easy to measure) than “innovation.” I could quibble with some of the weights, but the methodology seems reasonable to me.

    My reaction was probably skewed by the notion that innovation takes place where the CEOs are based, where the money is raised, and where the CSOs think big thoughts, but with virtual business models, a heck of alot of the actual discovery & development work takes place in CROs, which more often than not are in North Carolina. (Quintiles, PPD, INC, PRA, etc.) and a heck of alot of the manufacturing – where real estate and labor costs dominate – takes place outside the main innovation hubs.

    Full disclosure: I recently moved to the RTP area for an opportunity to make & manage life science investments, and have a vested interest in economic development, but I’m not posting here as part of my job. 3 months into my experience here I can say that there is MUCH more going on here than you might think. I’m blown away by the scale and diversity of life sciences here (incl agbio). It’s a bit weird that big pharma & venture-backed biotech drug discovery isn’t 90% of the life science economy here (compared to San Diego, Seattle, etc.) but in aggregate there’s ALOT going on and it seems that the biggest barrier to growth is getting enough talent.

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