When Amgen first came to Rhode Island, it moved into a plant built with state help for another biotech company, Welgen. Since then, the biotech company has invested $1.5 billion in local facilities, and by the end of the year, it expects to employ 1,700 people there.
The state also invested in CytoTherapeutics and provided credit guarantees for the startup to develop its technology and build facilities in Providence and Lincoln.
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CytoTherapeutics has since moved to California, but its infrastructure is now used by other biotech firms.
Altogether, Rhode Island has invested about $6.5 million and provided credit guarantees of another $30 million to life sciences businesses in the last 20 years, a new report says – and that has helped leverage at least $1.6 billion in private investment.
The life sciences industry – in biopharmaceuticals, biologic research, biomedical devices, cell line development, fish genetics, agricultural biotech and more – now employs more than 4,700 people in Rhode Island, the report says, with direct wages of at least $270 million.
The sector has proven itself, the report argues, with “internationally recognized scientists, technologies and companies,” above-average research funding growth, and “globally competitive” capabilities in a wide range of specialties.
In fact, Rhode Island “could become a major player in the life sciences,” the report says, “if the public and private sector leadership fosters effective development and exploitation of the technologies and applications.”
Unveiled last Monday at the State House, the report, “Biotech Rhode Island: An analysis of opportunities for growth,” was sponsored by the Tech Collective’s BioGroup, a nonprofit trade group promoting the life sciences industry. Developed over 18 months, the report looks at the life sciences’ economic impact in Rhode Island and “opportunities and constraints” for the sector’s growth here.
Katherine O’Dea, executive director of the BioGroup, said one of the goals of the study was to verify that the state’s investments “have been improving the infrastructure” of the industry.
“There has been negative press about the state investing in the biotech industry and those companies leaving,” she said.
The report also stresses the high quality of the jobs that life sciences companies offer. In biomanufacturing, which employs about 3,500 people in Rhode Island, the average wage is $64,379, the report says, compared with $40,810 for the average manufacturing job and $35,968 for all private-sector jobs.
Those well-paid workers, in turn, pay $16 million a year in income and sales taxes to the state, the report estimates. Citing a Milken Institute analysis showing that more than 122,500 biopharmaceutical jobs could be added in the United States by 2014, and noting Rhode Island’s disproportionate job growth rate in that sector already, the report estimates that by 2014, Rhode Island could add 4,500 biopharmaceutical jobs to its existing 1,500 posts.
At the report’s unveiling, Gov. Donald L. Carcieri made it clear that he believes in biotech. The figures in the report, he said, “highlight what we’ve known.”
“This industry, I’ve felt for a long time, is one that we can build on, because it builds on our strength that is here,” Carcieri said. “It’s up to us to figure out how we can keep driving it, focusing it, convincing people like Amgen to stay here … to keep growing here.”
Carcieri said he believes initiatives such as the recently passed “Biotechnology Jobs Growth Act,” which allows biotech companies to take advantage of state investment tax credits for up to 15 years, instead of the standard seven, will help to accomplish that goal.
In fact, the report cites the old seven-year limit as a barrier to biotech growth in Rhode Island, noting that the average length of time it takes to bring a life sciences product to market is 10 to 15 years, so credits accumulated in the first couple of years “have no value” if they expire within less than a decade.
The report also cites several other barriers to biotech growth in the state – starting with the fact that much of the grant-supported research being conducted here involves behavioral and public health, which yields few opportunities for commercialization.
That may be changing, the report says, thanks to more than $60 million worth of recent grants supporting basic research, such as the Centers of Biomedical Research Excellence (COBRE) awards to Brown University, Rhode Island Hospital and Women & Infants Hospital, or the Experimental Program to Stimulate Competitive Research (EPSCoR) grant being shared by the state’s universities.
Rhode Island itself does not provide support for basic life sciences research, however, the report notes. It only provides 7,500 square feet of incubator space, compared with New Hampshire’s 40,000 or Connecticut’s 266,000.
Rhode Island also provides limited early-stage venture capital funding – about $1 million per year, or 92 cents per resident, compared with $1.42 per person in Connecticut and $4.60 in North Carolina. And Rhode Island provides funds only at the early stage, which is “not a ‘best practice’ development strategy,” the report notes, because companies moving into pilot production operations often need just as much help.
In fact, the report notes, Massachusetts has lured away two Rhode Island companies in the last year with $5 million worth of loans as well as help with real estate.
The report also cites the lack of adequate facilities as a major obstacle to biotech growth in the state, noting that while the Boston area has about 3.1 million square feet of available space with labs that companies can move into, Rhode Island only has about 660,000 square feet, and it has a particularly bad shortage of spaces in the prized 40,000- to 90,000-square-foot range.
O’Dea said a solution would require public economic support in the form of bio-facility financing. Competing states offer programs to support the real estate needs of biotechnology companies, which put Rhode Island at a competitive disadvantage.
The biggest single growth barrier, however, is a shortage of talent, the report says.
Rhode Island has “innovative, creative research scientists, entrepreneurs and quality training programs,” it says, but it lacks “adequate scale.”
While in 2002, Massachusetts institutions awarded 323 doctorates in biological sciences, for example, Rhode Island institutions awarded only 29, the report says. Some Rhode Island biotech companies draw half or more of their workers from Massachusetts, it says, and in some cases, the share is as high as 80 percent.
Passage of a public bond for a $50 million new biotech research and education center at the University of Rhode Island will help on that front, Carcieri said.
Jeffrey Seemann, dean of environmental and life sciences at URI and co-chair of the R.I. Science and Technology Advisory Council, said the report will help guide the state’s future efforts to grow this important sector.
“We now know where we stand, and we know where we want to be,” he said. “The life sciences are Rhode Island’s Slater Mill of the 21st century.”
