Monday, July 2, 2012

What's wrong with New Jersey?

Also in this week's C&EN, Lisa Jarvis covers the Roche Nutley site closure. She ends her article on an interesting set of comments about New Jersey:
“Nutley’s legacy and footprint as a much larger former regional headquarters and a manufacturing site left us with an expensive and oversized infrastructure,” says Thomas G. Lyon, the Nutley site’s head. “While we have made notable progress to cut costs by more than 50% in the past two-and-a-half years, it was not enough.” 
The shuttering of the Nutley operations is part of a troubling trend for the life sciences in New Jersey. From 2007 to 2010, the number of drug industry jobs in the state fell by 22.4% to 32,794, according to a report released last month by the nonprofit Battelle and the Biotechnology Industry Organization.
Pharma’s retrenchment from New Jersey is a symptom of the industry’s changing approach to research, says Richard M. Gordon, a drug industry analyst at the University of Michigan’s Stephen M. Ross School of Business. Although the state is steeped in traditional drug discovery expertise, companies are now investing more heavily in large molecules and “information-driven discovery,” Gordon says. “New Jersey’s competitive advantage was one of the previous generation, but it offers nothing in terms of the new generation,” he says. When considering where to put new labs, pharmaceutical companies are increasingly looking at San Francisco and the Boston area, which offer proximity to biotech firms and academic research centers. 
Merck & Co. and Pfizer both shed jobs in the state after their 2009 acquisitions of Schering-Plough and Wyeth, respectively. Among the more recent setbacks for New Jersey, Sanofi is set to close its Bridgewater facility by the end of the year. Research activities will be moved to a new site in Boston.
The article also comes with a map that suggests that (according to BIO), the overall US biotech industry has lost 7.0% of its positions since 2007. Those losses fall unevenly on New Jersey, which has lost 22% of its positions during that time, while California has only lost -1.8% of its positions and Massachusetts has gained 4.2% of its positions.

I would like to hear some independent confirmation of Professor Gordon's hypothesis that New Jersey's pharma expertise is old and busted. I also suspect that "information-driven discovery" is a term that is compleat bulls---te mostly meaningless. I think that New Jersey's problems have more to do with the area having an unusually large amount of pharmaceutical research campuses (campii?); as we all know, these research campuses haven't done anything awesome for us lately and are just costing us money are prime targets for large pharma cuts, in that they're full of relatively well-paid scientists.

I don't have a hypothesis, but I do have a set of observations. At the start of the last decade, I would have said that there were 5 pharma/biotech metropolitan hubs (in order of prominence): Boston, San Francisco, New Jersey, San Diego and the RTP area in North Carolina. (Feel free to argue with my order in the comments.) It seems to me that New Jersey, RTP and San Diego have done the poorest, while Boston and San Francisco have maintained their positions. Why is that? I have no idea. (Guesses: relative prominence of local biology departments? local VC/startup culture? dependence on federal support?)

Readers, any thoughts?


  1. " RTP and San Diego have done the poorest, while Boston and San Francisco have maintained their positions."

    Boston and San Francisco contain top business schools-Harvard and Berkeley. When pharma companies decide to layoff, they seek consultation from business school professors even though they have no actual experience in the field and make decisions based on Harvard Business Review case studies. Harvard and Berkeley's business school professors are taking care of their alumns and sacrificing sites which are not close to their schools.

  2. The "information-driven discovery" will follow the path of other information-driven initiatives. The main principle here is GIGO - Garbage In, Garbage Out.

    High quality data, unbiased and with low noise, is necessary for successful driving the discovery. At the very least, a good estimate of uncertainty is needed to weigh the data.

    Recent revelations about the (non-)quality of pre-clinical data and general disregard of uncertainty of measurement and good statistical practices in pharma (med-chem, process, and analytical) labs don't bode well for success in an information-driven effort.

    For the sake of my own job I fervently hope the above view is biased and wildly off-target. However, can you remember the last time you saw a published uncertainty estimate of a yield in JOC or OPRD? How about an uncertainty of isomer ratio derived from an NMR spectrum or a HPLC trace? On the flip side, how often did you actually see a control chart with three or four points in it with an emphatic claim that “we are in-control”? Or a cellular assay with error bars based on two measurements?

    We pretend that nothing has changed in R&D and manufacturing since the 1930s. In the meantime the rest of the industrial world moved on and we are trailing at the sorry end of quality of development and efficiency of production.

  3. Unstable IsotopeJuly 2, 2012 at 2:41 PM

    The only explanation I can think of is that the NJ labs may be wrongly equipped for this new type of research. It's probably about the same cost to build a new lab than to retrofit old labs.

  4. Wow, CJ. No takers? FWIW, here's my 2 cents...

    Although New Jersey and California are equally unfriendly to business, Northern California has been able to spin itself as an innovation incubator for science and engineering industries. Contrast that perception with the view of NJ Pharma as stale and bloated. Not that I have anything against San Francisco, but I really fail to see the allure lifestyle or intellectual allure. Princeton and Rutgers should be able to hold their ground against Stanford and Berkeley; the same can be said about Duke and UNC-CH. Moreover, NJ and RTP are better places to raise a "traditional" family than either SF or SD in terms of education and housing. Having Harvard and MIT really boosts Boston, which would otherwise be a unappealing to any large corporation, i.e., high taxes, unions galore, and strict environmental regulations.

  5. As Derek Lowe pointed out today, one Japanese researcher published 172 faked publications. How many data points are included in the information that will drive the discovery process? Do we have the guts to clean up the databases once the fraud comes out and reassess the projects based on them?

  6. I blame Snooki for scaring away Big Pharma from NJ.

  7. "Moreover, NJ and RTP are better places to raise a "traditional" family than either SF or SD in terms of education and housing"

    who has time for a traditional family when you are working/commuting 60+hours a week in CA?

  8. My two cents on business friendly vs. business unfreindly? It's a load of garbage. "Business friendly" might mean a place to crank out mature manufacturing with little to no need of heavy research and infrastructure. If that is what pharmaceutical has turned into, then so be it. Let the KIA plant go in Alabama, Virginia, or Georgia. But if you want something new, fresh, innovative, that will ultimately move civilization forward as well as good jobs that aren't competing in the race to the bottom, then I guess a Boston, MIT, or Berlin might do just fine.

  9. They must be getting their info from Jay Leno.

  10. As a recent victim of the NJ layoffs, I have to agree that the stated rationale is bullshit. There are plenty of researchers who could pick up new technologies with relative ease.
    It's the salaries, facilities and allure of the culture of smartness. The executives, consultants and financial analysts think all the smart people are in Cambridge. They are also off on a fantasy that they can run pharma like wall street where all you need is a few hundred really smart people who will work around the clock as project managers for teams and contractors around the globe. Of course we know it won't work very well. But that's not the point. It's flexible and if one endeavor doesn't work, the really smart scientists will just jump to another company where they will be overworked high flyers with fantastic salaries.
    It doesn't seem like there is a plan and indeed there isn't. It's just desperation and trying everything because the money is going to stop soon and the management did not plan well.
    Oh, well.
    BTW, I think they're lowballing tge number of layoffs in NJ since 2007. Everyone I know has been laid off at some point in the last 5 years.

  11. Anon1252: Sorry to hear about your predicament. I too am a (not-so-recent) victim of layoffs in the NJ biotech/pharma sector. Although I was able to rejoin the workforce within a few months, I had to relocate and take a sizable pay cut. Incidentally, I wasn't relocated to either "Bay Area Biotech Hub"...I would have a difficult time making ends meet in those places on my current salary.

    As far as I can tell, effective propaganda is what's bolstering the life science industries in Greater Boston and San Francisco. I challenge anyone to provide evidence that Bostonian and San Franciscan scientists (native or adopted) are any more creative, diligent, and cost-effective than their disenfranchised counterparts in the Mid-Atlantic. Sure, the laboratories in NJ and PA are more ghetto, but at least they already have large production capacity for both small molecules and biologics. It's funny how perceptions can evolve over time. Prior to the slew of mega-mergers, the Midwest was a serious, albeit geographically diffuse, contender in the pharma industry.