GMW:_courting_biotech_is_a_bad-idea_virus,_says_economist

[Guest guest]

GMW:_courting_biotech_ " is_a_bad-idea_virus " ,_says_economist

" GM_WATCH "

Wed, 9 Jun 2004 22:37:49 +0100

 

GM WATCH daily

http://www.gmwatch.org

------

" 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. "

-------

States, cities court biotech, but is it worth it?

June 09. 2004 5:06PM

By PAUL ELIAS

AP Biotechnology Writer

http://www.starbanner.com/apps/pbcs.dll/article?AID=/20040609/APF/406090952

 

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 high-profile diseases.

 

" 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 and

revenues. "

 

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 need. "