Signs of Life The Biotech Industry in D.C.

1. Signs of LifeThe Biotech Industry in D.C. Heike Mayer & Alan Fogg Assistant Professor Graduate Student Urban Affairs and Planning Master of Urban and Virginia Tech – Alexandria Center Regional Planning

2. Roadmap • Introduction to Biotech Industry • Key Findings- Nation (Brookings Study 2002)- Regional update • Key Lessons

3. Why Biotech?  The next Silicon Valley  The battle for the Dot.Coms  Next Big Thing: Biotech • 83% of local development agenciesplace bio among their top two priorities • 41 States have biotech programs  Next next thing? Nanotech, Bio IT ?

4. Definitions & Methods • Biotechnology • Firms using genetic and cellular techniques • Biomedicine: diagnostic/therapeutic • Industry-developed definitions & data • Top 51 Metropolitan Areas • Census-defined CMSA/PMSA list • Triangulation of data sources:Research & Commercialization

5. Pharmaceutical Very large, global firmsTop ten average $15 bio sales Assets are products, distribution, manufacturing expertise Very profitable Industry Segmentation Biotechnology Small, mostly single establishment firmsTop ten average $700 mio sales Principal assets are people, research and future potential Lose money

6. Nine Metros Dominate Seattle Boston New York Philadelphia San Francisco Why these nine? Washington-Baltimore Los Angeles Research Triangle Park San Diego

7. NIH Grants Patents Venture Capital R&D Partnerships Startup Firms Established Firms Pillars of Biotech Development Research Commercialization

8. Leaders vs. the Pack Average Levels of Activity

9. Research Dispersing 1980s 1990s NIH $ 63% 59% Patents 71% 68% Top 9 Centers Share

10. Commercialization Concentrating 1980s 1990s Venture Capital* 81% 86% R&D Alliances* 89% 96% New Firms 61% 77% *Base data from early to mid-1990s Top 9 Centers Share

11. NIH Funding Research Grants, 2000 (Millions) 3rd

12. Biotech Related Patents Patents Awarded, 1990-1999 5th

13. Venture Capital Investment, 1995-2001 (Millions) 9th

14. R&D Alliances Value of R&D Alliances, 1996-2001 (Millions) 6th

15. Biotech Startups New Biotech Firms Started Since 1990 6th

16. Established Biotech Companies Firms with 100 or more employees 4th

17. Washington/Baltimore Cluster • Research Assets • Johns Hopkins, NIH • Cadre of Biotech Firms • Human Genome Sciences, Celera, Med-Immune, Alpharma, Genvec, Neurologic, Macrogenics • Dozens of others in biotech & related fields • BIO: National Industry Association

18. Washington/Baltimore Cluster • Clearly among the top 9 • Very strong in research • High levels of NIH funding • High volume of patents • Not as strong in commercialization • $85 million in venture capital • $17 million in R&D alliances with big Pharma • Heavily concentrated in Rockville-Gaithersburg

19. NIH Grant Awards Millions of Dollars

20. NIH Grant Awards by Sub-Region Millions of Dollars

21. NIH Grant Awards: Virginia Major recipient communities in Virginia: Richmond Charlottesville Blacksburg

22. Employment Washington MSABaltimore MSA Note: NAICS 54170 includes R&D in Social Sciences

23. Number of Firms Note: Includes NAICS 3254 and NAICS 54170 (includes R&D in Social Sciences)

24. VC Investment: DC/Metroplex Millions of Dollars Maryland D.C. Virginia

27. Biotech initiatives – Maryland • University of Maryland, Baltimore, opens $300 million BioPark • East Baltimore Biotech Park ($200 mio project; will house 30 to 50 companies; urban redevelopment) • Baltimore Development Corp. opens two Emerging Technology Centers (one near JHU) for bio and IT companies • University of Maryland College Park and University of Maryland Biotechnology Institute launch educational and research initiatives in nano-biotechnology and molecular bioprocessing • Maryland Department of Business and Economic Development (DBED) and Technology Development Corporation (TEDCO) fund early-stage companies • Townsend Capital of Towson launches a company to develop science- and technology-related projects with universities and health care systems

28. Biotech initiatives – Virginia In Northern Virginia • $500 million Howard Hughes Medical Institute campus (Janelia Farm) to open in Loudoun County • Eli Lilly to open plant in Prince William County • George Mason University awarded $25 million grant (largest in school history) from the National Institute of Allergy and Infectious Diseases for construction of a Regional Biocontainment Laboratory at its Prince William campus. • George Mason and Italian institute sign a three-year agreement to develop proteomics research program to unveil cancer diagnostics and therapies And in Richmond: • Philip Morris USA to build $300 million research and development facility at the Virginia Biotechnology Research Park in Richmond

29. Lessons from this region • The share of biotech employment in the overall economy is very small (~1.5 %) • Biotech is heavily concentrated in MD • Maryland ahead in commercialization • Baltimore MSA may become a leader • Strong & pro-active economic development environment in MD • D.C. and VA portion of metro need to focus on gaining in research, but even more so in commercialization • Potential to link to other economic strengths (such as homeland security, IT, telco, etc.)??

30. General lessons • Biotech tends to cluster (even sub-regionally) • Leaders have an edge (commercialization) • Entrepreneurship & VC are key- Entrepreneurial researchers- Industry-relevant talent- VC • “Bottom 42” -> hard to catch up • Modest payoff- No biotech firm among 25 largest employers- Averages about 3.5 % of manufacturing empl.- Most firms stay small

31. Thank You! Questions, Comments, Suggestions… Heike Mayer Virginia Tech Phone: 703.706.8122 E-Mail: heikem@vt.edu Brookings Publication: Cortright, J., & Mayer, H. (2002). Signs of life: The growth of biotechnology centers in the U.S. Washington DC: The Brookings Institution. Link: www.brookings.edu/es/urban/publications/biotech1.pdf