December 21, 2012
By: Richard A. D'Errico
Source: Business Review
Even with latest investment, leaders recognize there’s plenty of room to grow
Date: Friday, December 21, 2012, 6:00am EST
Both New York and the Capital Region have had success in biotech—the industry supports 250,000 jobs, for instance—but insiders complain that the sector is fractured and often loses out on jobs to other states.
What’s holding it back?
Thomas D’Ambra, co-founder of Albany Molecular Research Inc., a drug discovery company, says biotech lacks precisely what helped inspire success in New York’s nanotech sector—a centralized, crystallizing figure to lead the way.
“You almost have to have a czar there in the form of Alain Kaloyeros, with the vision and knowledge that he has,” said D’Ambra, who’s also president and CEO of Albany Molecular (Nasdaq: AMRI). “You need someone like Kaloyeros on the biotech side.”
Kaloyeros is the CEO of the College of Nanoscale Science and Engineering, ground zero for the state’s nanotechnology efforts. Based at the University at Albany, Kaloyeros has helped CNSE secure $14 billion in high-tech investments. More than 2,700 scientists, researchers, engineers, students and faculty work at CNSE. Among its 250-plus partners are the heavyweights of the semiconductor industry: IBM, Intel, GlobalFoundries, Sematech, Samsung and Toshiba.
Biotech needs that czar, D’Ambra said, more than a committee. Kaloyeros, D’Ambra said, “has done more for nanotech investments in the state than a council would do. When you try to do something by committee you get paralyzed.”
A leader nonetheless
It’s not that the biotech sector in the state and region is small. New York is consistently within the top three states in National Institutes of Health awards, which totaled $4.5 billion in 2010 alone. The 250,000 jobs the bioscience industry supports—both indirectly and directly—generate $309 million in personal state income tax, according to the Public Policy Institute of New York.
The Capital Region alone is home to more than 30 biotech companies. A recent sign of growth came last month from Regeneron Pharmaceuticals Inc. The discovery company has had early success with a drug to treat macular degeneration and announced plans to invest $70 million and add 300 more jobs to the 540 it already has in East Greenbush.
Yet venture-capital funding for bioscience in New York peaked four years ago at more than $200 million and is now well below $100 million, according to the latest Public Policy Institute report.
And New York’s biotech efforts are scattered all over the state. Albany has a mix of drug-discovery companies, university-based cancer and stem cell research efforts and medical device manufacturing, but no centralized entity with a master plan.
“Biotech and biopharm clusters are across the state,” said Nathan Tinker, executive director of the New York Biotech Association, which has 250 member companies representing 66,000 employees.
He pointed to North Carolina and Massachusetts as examples of states with dedicated funding for biotech. Massachusetts has a $1 billion, 10-year initiative aimed at supporting the life sciences industry.
“We tend to lose technology developed in New York to other states because we don’t have the infrastructure to help support and drive those smaller companies into larger organizations,” Tinker said.
“It’s not enough to have premier biotech research,” said Ed Reinfurt, director of New York’s division of Science, Technology and Innovation, also known as NYSTAR, a government entity. “We have long commented on the fact that we’re No. 2 or 3 in the nation in NIH research. But we have not experienced the type of economic growth that other parts of the country have experienced in the biotech sector.”
That is changing, he said.
“There is now a focused effort in addressing the reason why that is,” he said.
Without fanfare, the Cuomo administration has assembled a team to answer the question: What can we do to grow the biotech industry? It is chaired by state Department of Health Commissioner Nirav Shah.
Just last week, Reinfurt said, members of Associated Medical Schools of New York, a consortium of 16 public and private medical schools, including Columbia University, New York University and Albany Medical College, met with members of this team.
“Those type of meetings didn’t take place 10 years ago, talking about how we can stimulate job growth in that sector,” Reinfurt said.
AMRI’s D’Ambra, meanwhile, is doing his part to grow biotech upstate. He has invested in startups and helped create the Center for Economic Growth’s Bioconnex, a group designed to inspire biotech partnerships. Most recently, he announced new AMRI investments and jobs for upstate.
Earlier this month AMRI announced plans to open a research center and labs, not in Albany but in Buffalo. The move will create 250 jobs. New York is investing $50 million in the initiative. What’s notable about the deal is that CNSE played a role in steering the company toward Buffalo. That’s Kaloyeros’ outfit again.
“It’s the first step in a larger effort being driven by Kaloyeros and CNSE,” D’Ambra said. “In some ways, it’s kind of happening with the same guy.”
That’s because nanotech applications are expanding in biotech and health care sectors faster than any other. Kaloyeros said revenue derived from nanotech developments is expected to hit $2.4 trillion globally by 2016, with $1.5 trillion coming from medical applications alone. It’s one reason CNSE has a constellation with 12 professors focused on “nanobio.”
But Kaloyeros said if there is a need for a point person in biotech, New York already has it in Gov. Andrew Cuomo.
“It’s basically governor-driven and he’s basically put the right team together,” Kaloyeros said. “The strategy the governor has outlined in building the biotech industry—expanding in Buffalo and Albany—is going to help jump-start the industry in New York.”