Breakout year for Biomed
By kim ciottone
As industry insiders see it, 2006 could usher in a new wave of innovation for biomedical.
That could be a boon not only for Central Mass. biomed firms, but for job growth, as products in the pipeline come to market and new manufacturing operations get underway.
As of 2005, 57 state biotech firms had 180 products in clinical development. Looking at ‘06 and beyond,the Massachusetts Biotechnology Collaborative (MBC) says, the coming years will be crucial for the state’s biotech industry as an "unprecedented wave" of new products in the pipeline will be ready for launch. Such projects follow a decade of development and R&D investment.
Once a product obtains market approval, MBC President Thomas Finneran explains, a company must quickly ramp up manufacturing, marketing, sales, and support functions to gain market share as quickly as possible. A key concern going forward, he adds, will be ensuring that the right workforce will be available.
Abbott and Sepracor: Moving products to market
Demonstrating the need for non-Ph.D. level workers to fill those types of positions is Abbott, IL-based Abbott Laboratories, the fourth-biggest U.S. drug maker. The company, which operates lab facilities in the Worcester Biotech Park, launched a number of new pharmaceuticals and medical products in ‘05 and boosted manufacturing operations to produce those drugs.
"We filled well over 100 manufacturing, research and administrative positions at our Abbott Bioresearch Center in Worcester this year alone," says external communications representative Elizabeth Hoff. A majority of those positions support the company’s manufacturing and research operations. The company is actively recruiting on a number of local college campuses, including WPI, Clark University, Worcester State, Holy Cross, Northeastern and MIT.
Abbott also has a strong relationship with Quinsigamond Community College and attracts a number of manufacturing professionals through the school’s biotech certificate program. Abbott operates an active internship program at the site as well.
The need for qualified labor is expected to continue as more Abbott products come to market and spur revenues. Total sales were $16.3 billion through the first three quarters in’05, a more than 16 percent increase over the same period in ‘04. The company received two new approvals for HIV drug Kaletra. HUMIRA, its rheumatoid arthritis drug, gained approval for two new uses in Europe and the U.S. The company’s vascular business also won FDA approval for its carotid stent system for patients at risk of stroke.
Marlboro-based Sepracor Inc. is also adding jobs. The firm received approval in ‘05 for its insomnia product and began to ramp up its sales force, adding 1,500 total new employees, about 200 of which are in Massachusetts. "That is just one specific instance of what occurs when a company has success in coming through these pipelines," says MBC’s Finneran.
In March ‘05, the FDA also approved Sepracor’s XOPENEX HFA Metered-Dose Inhaler. And in April ‘05, the company’s sleep drug for treating insomnia and pain in patients with rheumatoid arthritis was approved for the U.S. market. Also in ‘05, Sepracor submitted a New Drug Application to the FDA for a new medication to treat chronic obstructive pulmonary disease. In addition, it submitted an application to the FDA for review of a new version of the drug Formoterol, used to treat chronic lung disease.
ECI and Charles River: Expanding operations
Another prime example of biotech expansion is Worcester-based ECI Biotech Expressive Constructs Inc. The company conducts research on protein design and expression used in diagnostic sensors and therapeutics. ECI’s product pipeline, set to launch in mid-to-late ‘07, includes a diagnostic sensor to detect urinary tract infections, as well as advanced wound care systems that provide early warning of emergent infections.
"We feel that we are going to have sensors going into everything from dental floss and bandaids to diapers and feminine products," says Dr. Mitch Sanders, president and founder.
The company already has forged corporate partnerships with Fortune 100 companies, It also received a patent for its ExpressDetect brand and has 17 patents pending. ECI has raised $5 million in seed and early stage funding. In addition, it has signed collaborative partnerships totaling $6.5 million with Fortune 500 companies and secured Small Business Innovative Research Funding in 1999 and ‘04 totaling $198,000.
In ‘05, the firm raised $2.5 million in additional funding and received an Innovation Award from the Small Business Administration. ECI, which employs 20 people, has begun product negotiations expected to be complete by the first half of ‘06. "All of those negotiations are going very smoothly, so we are gearing up for that," says Sanders. "We hope to be up to about 30-40 employees by next year. A major hire will be a new CEO to take the company to the next level.
Among other pans, ECI is gearing up for the launch of light manufacturing facilities. Some possibilities for expansion sites include the former Coca-Cola building on Shrewsbury St. in Worcester– as well as an additional building in West Boylston.
"We are very close to getting a major consumer product deal that would dwarf all of our other deals," says Sanders. "We envision that the company could have 100 employees in two years and be valued at over $250 million."
Expansions also are underway at Wilmington-based Charles River Laboratories Inc., which provides animal research models and services for drug discovery and development. In July ‘05, the lab purchased 400,000 sq. ft. at the former Hewlett-Packard Co. building in Shrewsbury to grow its preclinical capabilities. Over time, the company plans to relocate its existing Worcester operations, including 350 employees, and part of its Southbridge business to the site. Ultimately, an estimated 800 people will be working there. The company operates 101 facilities in 21 countries, with approximately 8,400 employees worldwide–1,200 in Mass.
All these developments signal the beginning of a project to make Massachusetts the firm’s premier full-service East Coast preclinical center. "The company will be hiring as necessary to keep up with this capital expansion," says Sanborn. The firm also expects the need for outsourcing to continue to remain strong in ‘06.
Charles River has experienced strong growth, with net income for third quarter of ‘05 increasing 61.5 percent to $41.7 million, compared to $25.8 million in the third quarter of ‘04. For the fourth quarter ‘05, Sanborn expects revenue growth of 19-22 percent.
"Our long-term financial goals are to achieve sales growth in a range of 11-12 percent," says Sanborn. He adds that, at current exchange rates, ‘06 revenue growth is expected to be in a range of between 7 and 9 percent.
Despite those positive returns, "biopharmaceutical companies are feeling enormous pressure related to costs," cautions Sanders. That’s due to the cost of development through to market, estimated anywhere from $800 million to over $1 billion for major new drugs. Only about one in 5,000 compounds will actually make it from discovery into a drug.
Mass BioMedical Initiatives: Full tenancy and growing
Success is also growing at Worcester’s MBI, a non-profit development engine and incubator for start-up biomedical companies. Currently, 15 companies with a combined total of 83 employees occupy its 16 labs, and MBI is in the process of adding another lab facility. "The incubators themselves are adding close to $12 million in economic value to the local economy," observes President and CEO Kevin O’Sullivan. And the life sciences sector overall, with about 110 documented bio-related companies, account for over $1 billion in economic development value. The goal, O’Sullivan, he says, "is to obviously keep those firms here in the city, the region and the state."
Securing the needed workforce to support the blossoming biomed sector is also crucial. "It isn’t the Ph.D. level or advanced degree level people typically associated with the industry who will be needed," says O’Sullivan. Advancement of products to market requires many new technical jobs associated with laboratory diagnostic testing and light manufacturing. "Those are high school, and two-year college graduate level jobs," explains O’Sullivan.
That’s why the industry is so concerned about the increasing trend of outward migration among the state’s 19-24 year population. "Those are the brains that we have to keep in the state, " says O’Sullivan, "because they are the fuel of our life sciences industry. They are our backbone, and we can’t lose them."
Kim Ciottone can be reached at: kciottone@wbjournal.com.
WBJ Web Partners
Most Recent
Most Recent
0 Comments