“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
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?