Thursday, August 27, 2015

Biotech cluster setup? Don't even bother.

Through a short summary from FierceBiotech's Nick Paul Taylor, I see that the Los Angeles Times is covering former Governor Jeb Bush's attempt to set up a biotech cluster around Scripps Florida (article by Noah Bierman): 
...He called a rare special session of the Legislature to approve the state’s share of the Scripps package — $310 million plus interest over 10 years — and won easy approval from the county government to spend more than $200 million. To make his case, he circulated a five-page economic impact study that said Florida could build a biotech economy every bit as impressive as the one that took decades to germinate in San Diego, only faster and bigger, with potential to add more than 40,000 jobs within 15 years of operation. 
Twelve years later, those dreams have not come true. 
Florida employed 27,611 people in biotech last year, according to the state’s Department of Economic Opportunity, or just 952 more people than it did in 2007, the last year for which the state has comparable data. Scripps accounts for many of those jobs, with a head count of 646 people in Florida. 
The data do show a doubling in the number of biotech establishments. And Scripps says it has attracted $425 million in federal grants and donations. 
But the promise of Florida’s investment was about a jobs bonanza from spinoff companies. 
Bush was captivated by the Scripps headquarters in La Jolla, a tony San Diego suburb where 2012 GOP presidential nominee Mitt Romney owns a home. The institute and its satellite offices are located along Torrey Pines Road, a verdant stretch connecting it to the famed golf course of the same name as well as sandstone coastal bluffs and the ocean. The biotech boom around Scripps is hard to miss. Science and medical companies dot the area.
Florida, meanwhile, remains an afterthought in the biotech world. No Florida city has cracked the annual list of top 10 biopharma clusters compiled by Genetic Engineering and Biotech News, an industry publication. Traditional powers including San Diego, Los Angeles and the Bay Area dominate the list...
First, does anyone who has experience in the Jupiter area disagree with the article's assessment? Is it too early in the game to make a call?

Second, this story allows me to tee off on a favorite hobbyhorse of mine, which is the quixotic attempt of local governments to get their cities/states into the biotech business. I personally think it's a tremendous money loser; the benefits only accrue to the lucky few scientists who are recruited in early, when there's a lot of government cash to hand out by the attendant politicians (who also benefit when they show up at ribbon cuttings.) The taxpayer is left with the bill. I think it's clear that to do this right, you need:
  • More than one world-class clinical research hospital 
  • More than one world-class basic research university
  • More than one large pharma/biotech/medical device company with a major R&D center in the geographical area
  • Lots of available venture capital
  • Lots of available experienced scientists
  • An amenable business climate
(I'll bet items 1-3 are most important.)

Even the cities that do have these things (I'm looking at you, San Diego, RTP) have not done nearly as well in the last 20 years as San Francisco and Boston/Cambridge. 

It's a mug's game and I think that Florida is only one example. 


  1. It's more than having a pool of experienced scientists available. It has to be a place where experienced scientists would want to live and (most often) where they would want to raise their children. As long as the fundigelical right has veto power in Florida politics over school curricula and planning for the effects of global warming on a state that averages somewhere under 100 feet above sea level, don't expect it to become Mecca for biotechs.

    1. A place where scientists want to live and raise their children? You must be under the impression that PhD chemists get to choose where they live. The truth is, a place just needs to be where corporate managers want to locate (tax/regulatory climate, labor costs, shipping costs. etc) and the chemists will shut up and go where the job is.

    2. Startups don't begin with large pools of MBA-toting drone doing cost-benefit ratios. The first hires are going to be experienced researchers with specific skill sets. Assuming that money is tight, putting the business somewhere that they already are is not a hard decision. No matter how attractive the business environment is, getting a company off the ground someplace where the key staff don't want to relocate to is a losing proposition. Consider how successful Dallas and Houston have been at becoming hubs for pharma.

    3. Absolutely. For corporate expansions, relocations, state/local incentives may play a role, but for startups the motivations are different. The people starting the company and the senior technical people have to want to live there, and local access to VC is also important. So they'll pay a lot of money to locate in the Bay Area or Boston rather than Florida, RTP, etc.

  2. Maybe I will write a biased post in Org Prep Daily one day, about the early days of Scripps FL. But to summarize, I think the article LA times has it right but the causes of lack-luster result are little deeper.

    What they have tried to do, was to attract top tier institutions to a place where there was not much biotech. In the meantime, they let the only good institution in the area, Harbor Branch Oceanographic Institute (responsible for natural compound research and cancer drug candidates like Discodermolide) to go bankrupt, in part for political reasons (some natural product chemists went to court to stop the port enlargement for shipping which caused lots of illegal dumping of the dredged-our crap on the corral reefs - this court case really pissed off the local business community).

    There is a decent biotech research going on in University of Florida in Gainesville (but the location is not that attractive, Gainesville only good thing is it is cheap rent and lots of young girls), and little bit in also in Tampa USF.

    When you throw lots of money on massively bureaucratic institution like Scripps, you get new expensive but dysfunctional buildings in return, on expensive land, and about 1 new job created for each 1 million USD spent.
    It would have been wiser to build biotech incubator on a scenic place, within walking distance to a beach, and subsidize it: Discount NMR services, low rent, overcapacity A/C air handlers that work well fume hoods, lots of lab and office space, subsidized literature access. Spend 30 millions on the incubator and give startups 500k write-off on capital expenses, spread over a 3 year period, to move in. I bet you can get that going for 50-60 millions, and the long term effect will be more impressive than Scripps FL.

    1. I don't know what you mean in reference to Harbor Branch - according to my Google-fu, they are still doing something in natural products:

      In the words of the Immortal Monty Python: I'm not dead yet.

    2. As soon as I saw Scripps and biotech cluster, I immediately thought of Milkshake.

      "Won't be fooled again..."


    3. 1) Grant money is not a helpful measure of success, since it can go away, and leaves no permanent mark. Also since Scripps is so heavily dependent on it, it's revenue of which not much ends up in research, or fostering startups.

      2) The driving force for the big biotech pools seems to be lots of schools with lots of smart people, but most of the country sees spending on education as a sink; looking at the bureaucracies, it's hard to disagree, but it's also hard to see how you're going to get that pool of potential workers and entrepreneurs otherwise.

      3) Biotechs seem to be operating (or want to operate) on asset-light plans, with lots of outsourcing (probably to China), so you're not building up a base of skilled workers in the hub. Building a hub involves lots of tax breaks, but without the likelihood of increased employment, what are you getting?

      If you're going to spend money to recruit businesses, then you need to recruit ones that require a range of talents and educations, and develop skills that people can't get somewhere else, and that can't easily be moved around in a tax-avoidance shell game. High-end manufacturing, maybe, might be a better target. Unfortunately, think this requires lots of patience and money, and no one has either. I think people in government are swayed by the glitz, appearance of smartness, and the order and cleanliness of biotech/small pharma and hope that the magical fairy dust of intelligence will impart a respect and patience for education that they aren't willing to show, and they don't look at what they're actually getting.

  3. I saw Mary Walshock speak earlier this year on the topic of why San Diego developed the biotech (and high tech) cluster it has, and she argued that real estate played a role, too- apparently the city donated some land at a key time and some early players helped make favorable leases happen and things like that. I keep meaning to read her book on the topic (Invention and Reinvention) but I haven't gotten to it yet.

  4. Like this brilliance?

    60 MILES FROM CAMBRIDGE. Genius. I'm sure that'll work.

    1. We already have a biotech/pharma cluster some 50 miles from Boston - in Worcester (due west on I-90).

      Providence got the idea of moving I-195 first and now they are looking for ideas on how to reuse the old corridor. The relocation fixed some safety and traffic flow problems for a paltry 0.5G$ and the demolition of the old bridge and road were torn down in 2012. There have been lots of ideas how to redevelop the space but most of them include the state spending lots of money well into the future.

    2. Area has the all-important cluster of Dunkin' Donuts shops.

  5. Harbor Branch Oceanographic Institute exists in name only. They got rid of their boats and submersibles, and lots their best people. What is left was taken over by Florida Atlantic Uni - a really terrible school.

  6. Does it even need to be mentioned that had Donald Trump been governor of Florida the state would have generated tens of thousands of jobs, and charged Massachusetts (sic) for it?
    Trump/Palin 16!

  7. Apparently the mayor of Chicago wanted a biotech startup by April 2014 ( DK if that happened.

    Dallas decided in 2002 ( that it would become a biotech hub. That seems to be going well.

    Thailand is looking to get in on biotech (, so good luck with that.

    Looks like Rochester MN wants in on those sweet sweet biotech bucks too:

    Fortunately, as Forbes presciently showed us in 2004 (, San Diego is the biggest biotech cluster....thoguh San Jose is catching up!

  8. Trying to cultivate whole new industries in areas would be difficult under the best of circumstances. Playing the lower taxes or tax incentives or out right subsidies game is a race to the bottom that rarely benefits any local government. Places need to think more in terms of what advantages they have rather than try to create an 'advantage' from scratch. The small town in AL I was born in has a surprisingly strong manufacturing sector specializing in parts supply for cars and such. Almost got the Mercedes factory that's now near Tuscaloosa.

  9. To me, Biotech can only expand if the number of good ideas that work from smart people expand. If the number of academic positions at top universities and the amount of grant money is any general barometer of great ideas-that work-that create jobs, I don't see that happening.

    Then politicians think that getting any ol' PhD from abroad is going to have a zillion great ideas that work and create all these wonderful jobs! *sigh*

    Yes! Trump/Palin 2016!

  10. For your reasons listed above it still puzzles me that Chicago isn't a bigger target for people to develop into a biotech center. There is scarce biotech/pharma in Chicago beyond Abbott/Abbvie

    More than one world-class clinical research hospital
    More than one world-class basic research university
    --University of Chicago and Northwestern. Not to mention the less prestigious University of Illinois at Chicago which has thriving biomedical and basic research as well. And a number of other schools that have lower tier PhD programs, like say, Loyola Chicago. The very top tier University of Illinois Urbana-Champagne is not far either. Then there's also Argon National lab, that has the most powerful synchotron for structural biology on the continent.

    More than one large pharma/biotech/medical device company with a major R&D center in the geographical area
    --Abbott/Abbvie is a start, but there isn't a second one

    Lots of available venture capital
    --Don't know much about this, but it is likely a problem

    Lots of available experienced scientists
    --University of Chicago and Northwestern are especially strong in the biological sciences, and neither are powerhouses for synthetic organic chemistry (although Karl Scheidt places people well in industry). However UIUC is such a powerhouse, and there are so many universities in the area to recruit from that are not particularly far (Michigan, Wisconsin, Indiana, Purdue, Notre Dame, etc.). I'm sure there are plenty of folks who work at Lily or Dow Agro who have ties to the midwest who would rather live in Chicago than Indianapolis as well. Then there are people from Abbot/Abbvie. Additionally, a lot of those Big 10 schools and the like have excellent analytical programs.

    Chicago is one of the great big cities in this country but compared to SF/Boston/NYC/Washington DC, it is incredibly cheap. A lot of the issues with finding a house that you can afford on a biotech/pharma salary in an excellent school district are not problems in the Chicago suburbs the way they are in SF/Boston particularly. And there are plenty of lovely suburbs to raise families. The weather sucks in the winter, but it's not worse than Boston.

    An amenable business climate
    --I guess this is the biggie. The state is all kinds of fucked and there are some policies that drive people to do business elsewhere.

    1. Maybe Chicago figures it has enough jobs of other sorts and enough features that it doesn't want to play in the zero-sum game of industry fishing? (It's not like cable, where offers only apply to new customers - if moving nets people nice tax breaks, other companies might decide they want them and threaten to move to get them). I'd figure the Chicago government is a problem - I'm sure potential entrepreneurs might mind them being liberal (mostly) but I figure they worry more about them being corrupt.