• WisBusiness

Tuesday, June 19, 2012

 12:02 PM 

National report has good news for Wisconsin's biotech industry

By Mike Flaherty

BOSTON – Wisconsin's biotechnology industry is still small but is one of the nation's healthiest, growing faster than any other state during the recession, according to a new report released today on the economic health of the nation's biotech industry.

The annual Battelle/BIO State Bioscience Industry Development report released today at the BIO International Convention showed that, nationwide, the sector added 96,000 jobs over the past decade, indicating the importance of the biosciences as an economic driver for the nation. But in most states that growth lagged, or even dropped during the recession in 2008.

   * Download the full report
   * See the executive summary

The report's state-by-state analysis of the bioscience industry showed Wisconsin was an exception. When Wisconsin's economy followed the rest of America into a recession, Wisconsin's biosciences and medical device manufacturers continued to grow.

In fact, the growth of the biotechnology sector compared to the rest of the state's economy "was the widest spread in the country," said Lisa Johnson, vice president for entrepreneurship and innovation at the Wisconsin Economic Development Corporation. "That's a strong statement. It shows that our biotechnology industry isn't just growing, it's also diverse."

"Our biotechnology industry is broader than most, so we're not as reliant as other states on single industries such as pharmaceutical manufacturers," added Tom Still, president of the Wisconsin Technology Council. "We have our eggs in a lot of baskets."

The fifth biennial report by Battelle, one of the nation's largest research and development companies reveals that during the 2001 to 2010 period, the U.S. bioscience industry added jobs, despite losses in both the overall U.S. total private sector industry employment and other leading knowledge-based industries. It also analyzes the current position and recent trends in national and state bioscience employment, establishments and wages.

The report showed that Wisconsin's biosciences industry's 1,366 businesses employed nearly 31,000 people in 2010, with annual average wages ranging from $54,822 in agricultural feedstock and chemicals, to $79,409 in the medical devices and equipment sector. That's compared to average wages of $36,796 for Wisconsin's total private sector, which covers 149,573 business establishments, according to the report.

Unfortunately, the report did not include the economic impact of clinical trial work being done nationwide, said Bryan Renk, president of BioForward, the trade association representing Wisconsin's biotechnology industry. Wisconsin last year was home to 9 percent of all the nation's clinical trials, Renk noted.

"We actually did much better than the report showed," Johnson added.

While the latest report details positive job growth in the industry, the broader economic and regulatory environment for the biotechnology industry remains challenging, said Jim Greenwood, president and CEO of the Biotechnology Industry Organization (BIO), which sponsors the annual convention. According to the National Venture Capital Association, U.S. venture capital funding for biotech was down 18 percent, he said.

Renk said that's a big problem in Wisconsin as well, but noted that a number of legislative proposals are still circulating to help improve the availability of venture capital for new and growing biotechnology companies.

The big problem in Wisconsin is that many companies can draw the start-up capital they need, but lack the ability to attract the second round of funding needed to take products from the laboratory bench to the marketplace – usually a $2 million to $5 million investment, Still said.

Renk and Johnson also noted that Wisconsin's agricultural sector didn't rate as well as the rest of its bioscience industry. "But we'll have to study that more closely," Renk said, noting that he wasn't sure what it is Battelle was measuring.

Complicating matters nationwide, Greenwood said the federal regulatory review processes are not keeping up with rapidly advancing science and are making it a more difficult environment to develop new treatments and products. A 2011 NCVA survey shows investors pulling out of certain areas of biotech, primarily due to the tough regulatory climate.

"Biotech holds great promise to help jump-start our nation's economy and continue to add high-wage jobs," noted Greenwood. "In order to help drive economic growth, and continue to help feed, fuel and heal the world, we need public policies that encourage investments in biotech innovation and a more transparent, science-based regulatory environment."

For Wisconsin, the Battelle report also reinforces the lesson about encouraging the sector that includes biotechnology, medical devices and biosciences, Johnson said.

This is a sector in which many of the jobs created are new jobs, not jobs Wisconsin attracts by encouraging companies to relocate here -- and some of these firms can add jobs quickly.

"I know because I came from that world," said Johnson, who was a senior executive at a number of area biotech companies, including Novagen in Madison. "When we started, we had four people and grew to 85 people. There are companies like this all over the state."

"This was a very good report for Wisconsin. It shows the importance of what we're doing here."

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