Analysis: NewYork, Philadelphia
gaining in biotech
Study Boston and San Francisco still hold top spots

Boston and San Francisco remain the powerhouses of the biotech and pharmaceutical industries, but the Philadelphia and New York regions, which split New Jersey’s cluster of drug companies between them, are closing in, a think tank’s analysis shows.
The Milken Institute study, commissioned by Philadelphia-area biotech and economic development groups to evaluate the industry in the region and its prospects, was released Monday at BIO 2005, the huge biotechnology conference that has drawn an estimated 18,000 people here this week.
The analysis ranked the Philadelphia region – which includes New Jersey from Princeton south and one county each in Delaware and Maryland – third among the 11 clusters nationwide, behind No. 1 Boston and No. 2 greater San Francisco. The New York region, which includes most of the remaining New Jersey counties, was fourth, followed by the clusters around Raleigh-Durham, N.C., San Diego, Los Angeles, Minneapolis, Chicago, Seattle and Dallas.
The study covered the entire life-sciences industry, comprised of biotech and pharmaceutical companies, medical-device makers and related research and development operations. It examined factors including employment, growth and investment capital in those fields, as well as in support businesses, including research hospitals and medical laboratories.
“Those regions that are going to grow the fastest are going to be the ones that form the closest collaborations amongst all these players,” said Russ DeVol, the report’s principal author and director of regional economics at the Milken Institute, which works to promote economic growth.
“You’ve seen other regions close the gap with Boston,” which has been No. 1 since the late 1980s but lately has had trouble keeping medical-device manufacturing and is basically “treading water,” DeVol said.
Over the last decade, the Philadelphia-area cluster has moved up in the rankings, buoyed by the many pharmaceutical companies in the region, including GlaxoSmithKline, Johnson & Johnson, Wyeth and Merck & Co. The cluster had about 53,000 life-sciences workers in 2003, including nearly 23,000 in southern New Jersey counties. The area has done a much better job lately of growing biotech companies, particularly in the Princeton area, DeVol said.
“Pharmaceuticals is more than seven times more concentrated in the greater Philadelphia area than in the nation as a whole,” DeVol said. Greater New York, which has strong medical research institutions, grew a bit slower than Philadelphia as it lost jobs to recent consolidation in the pharmaceutical industry, much of it in northern New Jersey, which had about 45,000 life-sciences jobs in 2003. Seattle and Raleigh-Durham have had strong growth, but from small bases. DeVol said the North Carolina cluster grew from nothing two decades ago, thanks to a careful plan to spin off university technologies into companies, attract venture capital and set up pharmaceutical manufacturing and biotech companies.
The biotech industry as a whole still loses billions of dollars a year, but state and local government leaders compete intensely to gain biotech jobs, which pay nearly double the U.S. average at about $62,000 a year.

Linda A. Johnson