Rhode Island’s biotechnology sector has grown from one with a few dozen employees to an economic driver that supports thousands of jobs, experts said during a panel discussion last week about the future of biotech in the state.
Hosted by the Tech Collective and sponsored by Amgen, the event featured Kevin Hively, principal of Ninigret Partners; Michael Lysaght, director of Brown University’s Biomedical Engineering Center; and Richard Horan, director of the Slater Technology Fund.
Hively said biotech now accounts for 1 percent of the state’s total private sector work force – a figure he admitted doesn’t sound significant. However, in Massachusetts, considered a world leader in the biotech field, the sector makes up only 2 percent of the work force.
The industry currently has a payroll of $260 million and involves nearly 4,500 people, said Hively. In fact, according to Lysaght, the field has grown to the point where it can finally be considered an industry cluster in the state.
“There are enough people in the business that when one company fails, another company can hire,” Lysaght said.
Part of the biotech growth can be attributed to a company that does not even exist in Rhode Island today, panelists said. CytoTherapeutics, one of the first biotech companies in Rhode Island, moved to Lincoln in the mid-1990s with the help of the state. But in 1999, the company closed its doors and moved to California.
Hively said that many people may consider the exit of CytoTherapeutics an economic development failure, but it actually made it easier for other biotech companies to grow here. While the 64,000-square-foot Lincoln facility sat vacant for several years, it has recently served as the home of several biotech companies, including Spherics Inc. and MultiCell Technologies.
“There are buildings and infrastructures that are here now that would not be here if it was not for that company,” Hively said.
The role that the state’s universities, particularly Brown University, have played is also invaluable, the panelists said. Brown Medical School, formed in the early 1970s, has fostered biomedical research. And Brown is now expanding its life science research facilities by 75 percent, a $120 million project on College Hill and in the Jewelry District.
The state also has made an investment in research being conducted at the University of Rhode Island with the approval of a $50 million bond for the construction of a life sciences center at the school’s Kingston campus.
Hively said the investments are a positive step, but still more needs to be done.
“The $50 million is a great start, and the state should be commended on it,” he said, “but there’s one school of thought that says that’s already too small.”
Hively said the state has infrastructure problems that need to be addressed, such as ensuring a good water supply. Recently, Amgen – the biotech giant that located in West Greenwich in 2002 – has butted heads with the local water authority, which has said it cannot guarantee it has enough water to meet the company’s future projections.
Also, Hively said there is a lack of available real estate and facilities for interested companies to move into.
“I’m not a proponent of, ‘If you build it, they will come,’ ” he said. “But I am a believer that if you don’t have anything, there is no way they are going to come.”
Horan also tackled a problem that has been receiving an increasing amount of publicity lately: Rhode Island-born firms making the decision to relocate into Massachusetts.
While noting that Rhode Island has attracted some firms from the Bay State in recent years, Horan said the best way to keep companies here is to look at creating incentives, including the entrepreneur tax credit being considered by the General Assembly.
“At the end of the day, the location decision is really about the CEOs and the investors and their commitment to basing and building businesses in Rhode Island,” Horan said. “Whatever we can do to encourage incentives to attract investors is … how we are going to address the problem.”
Still, despite these areas of concern, Rhode Island has managed to attract the attention of larger biotech firms, including Bristol-Myers Squibb Co. The pharmaceutical company recently announced that Rhode Island is one of four states being considered for a new manufacturing facility.
Horan said Bristol-Myers is considering the state because of its location, which offers easy access to the highest concentration of life science research in the world, and a substantially lower cost of living than in Boston.
In addition, he said, the responsiveness of state and federal government officials representing Rhode Island has made the state attractive.
To emphasize his point, Horan read pieces from a year-old interview with Amgen CEO Kevin Sharer, who spoke about the ease of doing business with the state’s elected officials.
“He’s the CEO of the most successful biotechnology company in the world and what is likely to be the most successful pharmaceutical company in the world in the next 10 years,” Horan said. “For him to summarize the state like that is why a Bristol-Myers Squibb is actively interested in locating here.”
