It used to be that the logic of states or countries competing for biopharma facilities was: get the laboratory, and then the headquarters will follow, and then the big payoff comes when a job-generating factory is sited near the HQ and the lab. That logic still exists-especially for governmental authorities that tie tax or investment incentives to the number of jobs generated. However, the explosive growth of biotechnology over the past 15 years or so, combined with the relatively healthy expansion of the pharmaceutical industry (and its intense commitment to (R&D), means that the market for research centers and laboratory facilities, all by itself, has become an attractive plum for regional development.

Another element of this growth is the support facilities for pharmaceutical distribution. With global sales now exceeding $600 billion, and with global trade steadily rising, the distribution centers, shipping points and warehousing capacities of the industry are also showing healthy growth.

A final growth component-actually bigger than all the rest combined-is delivery of healthcare itself. There is a boom in hospital development going on in the United States, especially with private facilities. The simple fact that U.S. healthcare is a $2-trillion/year economic sector creates its own developmental pull. Most large cities have hospital/clinical/outpatient health centers; most of those have teaching facilities attached. By tradition or choice, some cities, including Boston, Philadelphia, Houston, San Diego, St. Louis, Pittsburgh, Buffalo, Minneapolis and others, have made healthcare the centerpiece of their city's economic development.

"Healthcare, pharmaceuticals and, increasingly, biotechnology are among the most attractive industries to attract for economic development," says Dennis "Mickey" Flynn, president of Pennsylvania Bio (Malvern, PA), the state's biotech trade association. "The companies tend to be good corporate citizens, and the jobs they provide are high-quality, which in turn gives a boost to real estate, retail business and all the rest."

Translational research
The evolving trend here is to combine the clinical research needs of the biopharma industry with healthcare provision of major academic hospital centers. Patients get state-of-the-art treatment; industry gets pools of trial candidates; medical researchers get to combine treatment with research and teaching. This is the "translational research" process, a phrase increasingly on the lips of economic planners, FDA strategists (translational research is a key part of the FDA Critical Path Initiative to advance the drug development process) and both the applicants and grantors of research funding.

From a medical-research perspective, the emphasis on translational research also fits well with the well-recognized trend within drug development for personalized medicine. The phrase means different things to different researchers, but at its heart, personalized medicine will involve tailoring drug treatment to the genetics of the patient. The capability of quickly profiling the genetics of a patient, and to have the battery of potential medications readily at hand, will propel both translational research and personalized medicine in the future.

In reality, that pattern was set years ago by such pioneering health centers as the Mayo Clinic (Rochester, MN), Memorial-Sloan Kettering (New York), the Roswell Park Cancer Institute (Buffalo, NY), or the collaboration between the DeBakey Heart Center at Methodist Hospital and Baylor College of Medicine, both in Houston. Now, disease-related centers are a growing part of the funding coming from the National Institutes of Health and other healthcare supporters.

The Roswell Park Cancer Institute, which has been at the forefront of cancer research since 1898, gives a good example of both translational research and personalized medicine. The Institute has been responsible for numerous developments over the decades in cancer treatment, including photodynamic therapy, the prostate specific antigen (PSA) test and others. Now, a researcher there, Dr. Lionel Coignet, has discovered a genetic factor that is a good predictor for "distant metastasis"-the development of harmful tumors away from the primary cancer site, especially for breast and prostate cancer. A new company, PersonaDX, was founded last October with backing from Roswell, and a facility that ultimately will employ 250 personnel is already under construction in the Buffalo Enterprise Zone in the city.

THOMAS KUCHARSKI, BUFFALO NIAGARA ENTERPRISE

"PersonaDX could eventually add $50 million to the Buffalo economy each year," says Thomas Kucharski, president of Buffalo-Niagara Enterprise, the economic development agency for the region. "But the home run for us is to have the growth in research facilities and teaching that supports such development. There are more than 100,000 students in college in the Buffalo-Niagara area, and we want to be able to support both the educational enterprise as well as the growth in employment."

Education, space and market access
Mention of education in the Buffalo region brings up a theme consistently emphasized by everyone involved in site selection: the availability of trained personnel to staff the organizations, and to provide for growth. It is practically axiomatic that where there are strong educational resources, there is a pool of trained professionals; when it comes to running biopharma organizations and conducting research, the availability of those professionals make a difference. In turn, they become the potential business and research leaders for the educational institutions, further raising the capabilities of a region.

BRISTOL-MYERS SQUIBB'S FT. DEVENS, MA BIOLOGICS FACILITY WILL OPEN IN 2009. credit: BMS

This was the original driver for San Francisco becoming a biotech industry center, as well as Boston, the Research Triangle Park area of North Carolina, and newly rising centers like San Diego or Florida.

There is talk-and some action-that, as a result of the fantastic amounts of money coming out of the Bill and Melinda Gates Foundation, Seattle and the surrounding region (home of Microsoft Corp.) may become a new center for infectious disease research and public health think tanks. Earlier this year, the University of Washington regents began discussions with the Gates Foundation to fund a Health Matrix Institute at the school, an idea that had first been floated and then dropped at Harvard University. The proposed institute would be part of the UW's existing Dept. of Global Health, which itself plays off the Gates Foundation's interests in malaria, AIDS and other disease scourges. The Gates Foundation helped fund that department.

New Jersey's Montclair University will be the beneficiary of a new alumni donation of $8.5 million, coming from the Margaret and Herman Sokol Foundation. "Montclair State University continues to demonstrate a commitment to providing the kind of skilled, highly educated workforce that helps make New Jersey the pre-eminent location for the global pharmaceutical and medical technology industry," said Bob Franks, president of the Healthcare Institute of New Jersey. "The investment they are making in the sciences is an investment in the health of our citizens and the health of the state's economy."

Another source of funding, controlled by state governments, has had broad-based impact over the past several years: the tobacco-industry settlements. Many states have invested that settlement money into educational and health resources; the biotech and pharma industries will be among the ultimate beneficiaries.

North Carolina, which delicately titled its tobacco money as the "Golden Leaf Foundation," has pooled that money with other state funding sources to support a growing network of educational and on-the-job training. Organizations include BioNetwork of the North Carolina Community College System, the Biomanufacturing Research Institute and Technology Enterprise (Brite) at NC Central University and the Biomanufacturing Traning and Education Center (BTEC) at NC State University. The North Carolina Biotechnology Center, located in Research Triangle Park, plays a coordinating role with the educational institutions as well as industry. All of these (and some more) are wrapped together as the Biomanufacturing and Pharmaceutical Training Consortium.

"There are a wide range of pharmaceutical and biotech businesses growing in North Carolina now," says Barry Teater, director of communications at BTEC, "but we're seeing a particular trend in vaccines and biotherapeutics with companies like Wyeth, Merck and Talecris Biotherapeutics." The range of educational support, however, extends from the latest biotech research to manufacturing-oriented technical training in equipment maintenance, cell-culture systems and packaging equipment. The consortium even sponsors a bus that can travel from manufacturing site to manufacturing site (or school to school) to provide training in GMP practices, or in high-school level biology for students. "K-12 education is becoming a new focal point as we recognize that we need to do more to fill the pipeline of science-oriented college students," says Teater.

Room for expansion
Of course, with hundreds if not thousands of sites already developed and in use by biopharma organizations, the industry is never looking at a blank slate when it comes to finding the next desirable site. In most cases, the complex calculations of access to a trained workforce, educational institutions and regional development incentives are balanced against real estate costs, room for expansion and logistics considerations. The high living costs around San Francisco and other parts of California constrain further expansion of biopharm there. Numerous press reports in the past year cite the difficulties of finding available space for laboratories in locations where the industry has already established itself.

SCRIPPS FLORIDA'S MULTI-FACILITY COMPLEX WILL OPEN IN 2009. credit: Zeidler Partnership

That was one of the reasons (certainly not the only one) for Scripps Institute (La Jolla, CA) to decide to build a branch in Florida, Scripps Florida. But initial plans to use undeveloped land in the western part of Palm Beach County, but "egal and other issues caused the county to decide a year ago [in 2006] to situate the facilities on 40 acres of the Florida Atlantic University campus and ultimately on an adjacent 100-acre property," according to a Scripps Florida statement. Construction is already underway there, aiming for a 2009 target date to provide 350,000 sq. ft of office space for 545 workers and researchers.

Although one of the Scripps Florida divisions is called the Translational Research Institute, there is no explicit relationship between Scripps Florida and any nearby health centers. Rather Scripps Florida expects to be depending on high-throughput screening assays, flow cytometry and genomic technologies to identify and assess drug candidates. The beneficiary of $310 million in state funding authorizations, Scripps Florida is also committed to boosting the biopharma capabilities of the rest of the state; a program is being developed to allow researchers at other Florida institutions to make use of the technology resources at the organization.

Available space is dictating some of the siting choices in North Carolina, home of the famed Research Triangle Park, which has been attracting biopharma and other high-tech industries since its founding in the late 1950s. Today, according to Rick Weddle, RTP Foundation president, there are only about 600 acres left to develop (out of about 7,000) unless the Foundation decides to acquire more, adjacent land. "If you need cheap land, you?re in the wrong place," he says. RTP is a private entity, but its activities are coordinated with the surrounding universities and with the state. Looking to spread the beneficial aspects of RTP-type economic development, the state has assisted in developing the Piedmont Triad Research Park (PTRP), a planned development mostly in downtown Winston-Salem in the western part of the state. PTRP will benefit mightily from the nearby facilities of Wake Forest University, whose Health Sciences organization is based there. At about 600,000 sq. ft of built-out space today, PTRP expects to be managing 5.7 million gross sq. ft across a 240-acre site in the future.

PTRP is currently getting a lot of mileage out of the Wake Forest Institute for Regenerative Medicine, which has successfully grown replacement bladders for injured patients, and is now looking into developing treatments for burns and lost limbs for military vets. Its director, Dr. Anthony Atala, MD, has both identified a new source of stem cells (from amniotic fluid) and has pioneered the regenerative medicine technology. Strictly speaking, the technology is not biopharma (i.e., a new drug), but certainly points in a direction of both personalized medicine and biopharma therapies. Within PTRP, the number of biotech, med device and health-related companies has grown to over a dozen.

While state or regional governments try to spread the wealth around their region, the business drivers sometimes dictate a further concentration in areas where transportation and market access are rated positively. "A good plan will balance the logistics functions with the other factors," says Bill Menna, a director at UPS (Louisville, KY). "To do this right, you have to factor in both inbound costs for raw materials, outbound costs for products, and where and how you warehouse both of those." Menna, who says that the best-run pharma companies bring a company like his into the evaluation process, notes that tradeoffs can be assessed to meet business goals. "For example, let?s say that because APIs or other raw materials are being imported from a region of the world with uneven delivery capabilities, you would address that by building larger warehouse capacity and keeping more materials in reserve," he says.

Besides its well-known delivery capabilities, UPS also manages an international network of warehouses and logistics centers. In the case of air freight, it sometimes recommends making use of its Louisville Worldport, which is the North American hub for international air freight, and can also provide next-day service to most of the continent.

International scene
Having been a global industry almost from its inception, biopharma is accustomed to looking at the entire globe for siting facilities, getting access to a trained workforce as well as to markets.

For many years, Ireland has been such a crossroads for biopharma, and its entire "Celtic Tiger" economy is now booming. In the past year, it has racked up a sizable number of project wins, including projects of Gilead Sciences (in Dublin) GSK and Eli Lilly (both in the County Cork area), Merck, Sharp & Dohme (Ballydine) and Servier, a Paris pharma company that will open a new area in Ireland to biopharma, the Belview Site near Kilkenny. Together, these projects represent roughly 1 billion euros in just the past six months.

The Belview site is one of several that IDA Ireland, the country's economic development authority, has reserved for industrial development. Barry O'Dowd, SVP, notes that the agency has initiated a seven-year Strategic Site Initiative to plan for future growth across the country. In some cases, it is investing in making greenfield sites "spade ready" for a tenant to come in and build, by putting in roads and utility connections. In other cases, it is looking to extend the resources available near its leading university centers by organizing industrial parks or incubator facilities that can tap into the academic facilities. "We certainly appreciate the vote of confidence that these companies are making in Ireland," says O'Dowd. "But at the same time, we're looking for new, next-step efforts by trying to get process development facilities collocated with manufacturing sites, or to grow the research laboratory base as well as the manufacturing base. We want a healthy level of technology transfer to be going on, as well as generating factory jobs."

The classic research-leading-to-commercialization pattern is certainly the case in Singapore, where the Agency for Science, Technology and Research (A*Star) is now entering a second phase of a "Biopolis" center for biomedical research. A*Star spent $1.3 billion on the first phase, building nine research centers and hiring 1000 biomedical scientists; a same-cost second phase that will emphasize translational research through collaborations with health centers.

In recent months, the Economic Development Board of Singapore has announced groundbreakings, new contract wins or project expansions with Bio-Rad, Lonza, Genentech, Eli Lilly and GlaxoSmithKline (the latter opening a laboratory at Biopolis). EDB Singapore says that the value of manufactured goods in biomedical sciences (biopharma and med devices) grew by over 30% in 2006, to S$23 billion ($15 billion), and has quadrupled since 2000.

On the logistics side, Singapore touts its attractiveness as one of the leading hubs for ocean and air freight for all of Asia. DHL (Plantation, FL) has recently expanded its healthcare logistics services; TNT has just opened a Life Sciences Express Hub; and BAX Global (Irvine, CA), which is in the process of merging its operations with Schenker Logistics, recently opened an S$48-million "megahub" with facilities for pharma cold chain management there.