Super Cluster

Ideas, perspectives, and trends shaping the global impact of the Massachusetts life sciences industry
Volume II June 2008

About the New England Healthcare Institute The New England Healthcare Institute (NEHI) is a nonprofit, health policy institute focused on enabling innovation that will improve health care quality and lower health care costs. Working in partnership with members from across the health care system, NEHI brings an objective, collaborative and fresh voice to health policy. We combine the collective vision of our diverse membership and our independent, evidence-based research to move ideas into action. About the Massachusetts Technology Collaborative The Massachusetts Technology Collaborative is the state’s development agency for renewable energy and the innovation economy. It works to stimulate economic activity in communities throughout the Commonwealth by bringing together leaders from industry, academia, and government to advance technology-based solutions that lead to economic growth and a cleaner environment in Massachusetts. About the Massachusetts Life Sciences Center The Massachusetts Life Sciences Center is a quasi-public entity created by the legislature in 2006 to promote the life sciences within Massachusetts. The Center is at the heart of the state’s $1 billion life sciences initiative. The Center is fast becoming the hub for connecting all sectors of the life sciences community—encouraging unprecedented public-private collaboration among industry, research, academia, and government. The Center is making strategic investments in our life sciences workforce and in translational research at critical stages of the development cycle. These investments will foster and grow the Massachusetts life sciences enterprise, cultivating innovation at institutions whose research, development, and commercialization of therapies, products, and cures hold great promise for improving and saving lives. About PricewaterhouseCoopers Health Industries PricewaterhouseCoopers Health Industries serves as a catalyst for change and the leading advisor to organizations across the health continuum, including payers, providers, health sciences, biotech, medical device, pharmaceutical, and instrumentation companies, and employer practices in the public, private, and academic sectors. With a distinctive approach that is collaborative, multidisciplinary, and multi-industry, PricewaterhouseCoopers draws from its broad perspective and capabilities across and beyond the health industries to help solve the array of emerging complex problems health organizations face, lead cultural and clinical transformation, and create a new, sustainable model for care delivery that is quality driven, patient centered, and technology enabled.

Introduction by Governor Patrick

June 2008 Dear fellow citizens of Massachusetts, The past year has been an eventful and exciting one for the Massachusetts life sciences super cluster. Since our life sciences initiative announcement at the BIO International 2007 Convention in Boston, the Legislature has made significant progress towards passing a comprehensive $1 billion life sciences law. Important discoveries have been made at our world-class medical and research institutions in a range of areas from cancer to HIV, which will result in life-saving treatments and cures and save millions of lives. Companies are continuing to come and grow in our Commonwealth, creating new jobs. This is just the beginning. I now look forward to advancing key programs that will enable the life sciences industry sectors to continue flourishing in the Commonwealth. From stem cell research, biomedical device manufacturing, and pharmaceutical development, the investments being made by the state and through the Massachusetts Life Sciences Center are providing real support for Massachusetts’ emerging technologies and innovations. And our perspective is a global one. Last December, I went to China to develop and strengthen partnerships to connect our life sciences super cluster to this important and growing region. We had the opportunity to see first-hand how the life sciences industry is exploding overseas, and to create our own global collaborations. Today, we remain actively engaged in China and other key emerging international economies, understanding that the impact and scope of our work necessarily moves beyond the border of our state and of our country. Together we will develop a lasting legacy for the economy and citizens of the Commonwealth. The products of this legacy will include health care advancements around the world for generations to come. With focus and discipline, we will grow and protect our position as a global leader in the life sciences. We will strengthen our role as the international hub of healing. Sincerely,

Governor Deval Patrick

Contents .

01 Executive Summary 02 Introduction letter by PricewaterhouseCoopers 03 Introduction letter by the Massachusetts Life Sciences Center 04 Defining the Massachusetts biomedical industry 08 Perspective: Massachusetts life sciences—locally linked. and healthcare engine for continued growth in central Massachusetts 22 Early stage company development 23 Perspective: Accelerating academic research to solve real problems—a story of academic innovation and the translation of ideas to impact 26 Interview: Phillip A. globally connected 09 Perspective: Strategic economic development built upon international collaborations 10 Technology and entrepreneur development 11 13 16 17 Public funding Perspective: Ushering in a new age of biomedical research Perspective: Crossing the bridge from academia to industry—technology transfer in biotechnology Perspective: The role of state government in promoting innovative research in the life sciences that can lead to new medical treatments 18 Interview: Raju Kucherlapati 20 Perspective: The role of entrepreneurship in building a biotech cluster 21 Perspective: Projecting tactics and message—promoting startup companies as an economic. scientific. Sharp 28 Private financing 32 Perspective: Capital formation 33 Perspective: A model for utilizing Massachusetts’ resources to create the next generation of life sciences companies 34 Perspective: Fostering medical device entrepreneurship 35 Perspective: A statewide effort to accelerate the pace of creating life sciences companies in Massachusetts 36 Perspective: Gateway to growth and the global market 37 Perspective: Incubating innovation at Tufts Veterinary School 38 Employment 39 43 44 46 47 Introduction and industry overview Perspective: Inspiring the next generation of life sciences innovators Perspective: Life sciences talent leadership Perspective: The importance of training minorities Perspective: The Massachusetts Life Sciences Talent Initiative 48 Maturing companies 49 50 52 53 Perspective: Bay State’s super cluster provides optimal ecosystem for innovation Interview: Christoph Westphal Perspective: Covering all the bases: biopharmaceuticals and Boston Perspective: Innovative medicines based on a breakthrough discovery 54 Clinical trials 55 57 58 59 Perspective: Global opportunities for clinical trials Perspective: Initiatives in clinical research to provide quality care to patients Perspective: Translating research results into clinical therapies Perspective: Synergistic drug combinations for treating serious diseases 60 Biomedical manufacturing 62 Perspective: Global growth 63 Perspective: Massachusetts’ manufacturing strategy 64 Global companies 65 66 68 70 Perspective: BI3—a new model for transforming discovery into therapeutics Perspective: Lessons learned—our transformation from R&D to a commercial enterprise Perspective: From Chinatown to China. Genzyme’s commitment to patients motivates its global development Interview: Deborah Dunsire 72 Looking forward 76 Conclusions by the New England Healthcare Institute and the Massachusetts Technology Collaborative 77 Methodology and sources .

This life sciences super cluster represents a vital. resources. The Massachusetts life sciences super cluster is one of largest. well financed investors. a heritage of innovation. growing economic foundation for the Commonwealth. not gravity. Massachusetts is recognized as around the world as a leader in discovering treatments and cures for the infectious and chronic diseases that afflict society. It also involves a large public and commercial effort to support those enterprises. The super cluster encompasses the universities. best known and most established centers for biotechnology and medical device research and development in the world. . gravity holds together super clusters. imagination. and an ability to converge ideas. themselves made up of billions of stars and planets. it is the leading institutions in academia and business that comprise a super cluster focused on curing disease and improving living conditions around the world. and a cadre of well educated. In Massachusetts. which binds this group together. Because of the groundbreaking work that has emanated from the super cluster. the massive structures of unimaginable size composed of clusters of galaxies.Executive summary In the cosmos. hospitals. And it is innovation. and capital. and companies directly involved in the life sciences.

5 percent during this period.247 employees. Industry and government leaders must work to ensure that the super cluster becomes the preeminent hub for global life sciences research and collaboration. National Institutes of Health (NIH) funding has stagnated in recent years. As competition heats up around the world. These articles do not represent the views of PricewaterhouseCoopers LLP. Business. • Executives considering to open or expand biomedical manufacturing facilities in Massachusetts must weigh the Commonwealth’s research and technical prowess against high wages. and high taxes. It begins in the lab. rising needs. Two of the Commonwealth’s biggest life sciences acquisitions in the last 12 months involved foreign companies. grew 8 percent between 2001 and 2006. titled “Perspective” and “Interview. entrepreneurs. and biomedical manufacturing.” from and about individuals in the Massachusetts’ life sciences industry. the entire Massachusetts work force shrunk by 2. education. This figure has remained virtually the same since 2003.2 billion in NIH funding in 2006. • The life sciences work force. established healthcare systems. Along the way. and academic and government officials—share their perspectives on the region’s growth and its impact in the global marketplace. • The Commonwealth received $313 per capita in NIH funds in 2006. in the past 5 years. clinical trials. while inflation has risen and research costs have increased. Globalization represents Massachusetts’ life sciences industry’s greatest challenge. it also underlies the importance of NIH funding to the future state of its research capabilities. venture capitalists. • Confidence runs high in Massachusetts. • Massachusetts-based companies are already discovering ways to tap foreign markets for sales. • Massachusetts hosts a large number of clinical trials compared to states with a larger population. some of the super cluster’s most notable leaders— including a Nobel Prize winner. The report is designed to help the life sciences industry assess its strengths and weaknesses at a time of mounting challenges. This report looks at how Massachusetts’ biomedical practitioners are using the super cluster’s resources to transform the life sciences industries and the practice of healthcare. one of Massachusetts’ most daunting challenges will be to produce the next generation of scientists. researchers. As life sciences continues to evolve into a global enterprise. chief executive officers. burdensome permitting procedures. • Researchers and companies around the world look to Massachusetts for groundbreaking ideas and products. especially to counties and cities with trained professionals. according to survey results.1 1 This report contains articles. entrepreneurial work force. • Biotechnology companies received 72 percent of venture capital funding in 2007. and leaders. and bountiful opportunities. The Commonwealth’s life sciences industry boasts a growing. pharmaceutical companies may shift more clinical trials outside the United States. pushing them instead toward conservative proposals that will be easier to fund. • Lifestyle issues are more likely to lure life sciences workers away from the Massachusetts super cluster than pay or commute times. • The Commonwealth received $2. and government officials must expose students to the world of work in the life sciences by expanding internship and cooperative education programs. and its biggest opportunity. Private investment in Massachusetts-based life sciences companies has grown 66 percent. representing 77. but gave them poor marks on their willingness to fund radically new ideas. Executive summary • Industry leaders say Massachusetts must create more workers by inspiring local children to pursue careers in life sciences. In comparison. to $1.3 billion. • PricewaterhouseCoopers/Xconomy survey participants ranked Massachusetts venture capitalists highly on their life science expertise and connections. and progresses to a worldwide perspective. •1 . as two-thirds of survey respondents said they want to work for startup companies in their next position. and medical device companies received nearly all of the remainder. It may also discourage researchers from tackling society’s most difficult medical problems. more than any other state or district. While this highlights Massachusetts’ relative strength in winning grants. • This flatline funding trend may dishearten an entire generation of Massachusetts scientists.Even though the federal government continues to invest heavily in life sciences research in Massachusetts. innovative. and lower research costs. where federal funds often play a critical role. and 70 percent said they believed they would find a position of equal or better stature in the super cluster if they lost their job.

With the world’s largest concentration of life sciences firms. Health Industries PricewaterhouseCoopers LLP Gerald J. It’s where entrepreneurs grow new businesses and policymakers work to find innovative new solutions to issues such as insurance. the growth of the life sciences industry. Our super cluster can evolve into the premier international hub for ideas and cooperation. We are honored to again team with Massachusetts Technology Collaborative and the New England Healthcare Institute. Globalization is one of Massachusetts’ biggest threats. the future of medicine. and the sustainability of our nation’s healthcare system. medical device and instrumentation firms. and trends shaping the global impact of the Massachusetts life sciences industry . PricewaterhouseCoopers’ Health Industries Practice has been active in helping the industry reach its potential. this is the place where scientists discover new therapies. but we believe Massachusetts has the distinct and inimitable assets to remain the worldwide leader. PricewaterhouseCoopers is committed to the economic vitality of Massachusetts. but also one of its greatest opportunities. researchers. improve diagnostic methods. James M. but from around the world. Sincerely. robust survey results. Super Cluster II.Introduction by PricewaterhouseCoopers Massachusetts remains a worldwide leader in healthcare. published Pharma 2020. However. employers and policymakers—we have a distinctive. and academic medical centers. providers. As one of the largest advisors to Massachusetts-based organizations in the health sector—biotech firms. the Massachusetts Life Sciences. and unique perspectives from local industry leaders. Industry and government leaders must continue to collaborate if Massachusetts is to remain a global leader. payers. and create better analytical instruments. and hosted the Healthcare 180° conference. flatter. competition for talent and funding is rising—not only from other states. Health Industries PricewaterhouseCoopers LLP Super Cluster II Ideas. pharmaceutical companies. and we are very pleased to be joined by a new partner. The past is not a guarantee of future success. broad view of industry challenges and opportunities. Strengthening the ties that unite our different communities and interests into a common super cluster will help this state preserve its role as a national and global leader in the life sciences industry. McDougall Partner. Super Cluster II brings together economic analysis. perspectives. Connolly Partner. We may discover that the world is indeed getting smaller. and more competitive. We presented the Massachusetts Life Science Caucus. academic medical centers. We have brought our experience to this updated report.

both to be located at the UMass Medical School. and empowered by the passage of the life sciences bill. Having spent the last 35 years working in the life sciences and healthcare sectors. The Stem Cell Bank will serve as a repository of hESC lines that are derived in research institutions throughout the Commonwealth and beyond. the Center will build on this momentum to expand life sciences research. was launched in February 2008. one of our primary initiatives. Through continued collaboration with our partners. research and industry partners. new faculty. and improve health outcomes for our patients. Obtainable funding for research grants and workforce development programs will provide essential resources at a time when NIH funding is flat and there is a critical need to grow the pipeline of talent that supports the life sciences. A second major initiative is our funding approval for a Stem Cell Registry and Stem Cell Bank. Now. I am proud to be the new President and CEO of the Center and look forward to contributing to our next exciting chapter in life sciences. The web-based Stem Cell Registry will be a comprehensive and extensively documented international human embryonic stem cell (hESC) registry. Since Governor Deval Patrick announced the $1 billion Life Sciences Initiative just over a year ago. this program will fund up to $12 million for translational research in Massachusetts. Susan Windham-Bannister Incoming president and CEO of the Massachusetts Life Sciences Center •3 . and government to develop synergies between the needs of our employers and those of our talent pool. providing vital support for young investigators. A third initiative underway is our Life Sciences Talent Initiative. we have commissioned research through UMass’s Donahue Institute to better understand the current and future trends of our world-renowned life sciences work force. the Legislature has led us to the threshold of a new law that will commit an unprecedented level of state funding for these important economic sectors. The Massachusetts Life Sciences Center was created by the Legislature in 2006 to promote the life sciences throughout Massachusetts and already is making progress. the pending life sciences bill promises to further propel the Center towards becoming the nucleus for public-private collaboration among our academic. With support from the John Adams Innovation Institute. providing the public with access to important documentation relative to hESC lines. Sincerely. We are well on our way to solidifying Massachusetts’ position as the global leader in the life sciences. Grants will be awarded this summer through a competitive peer-review process based on scientific merit and economic development impact and under the guidance of our expert Scientific Advisory Board. New tax incentives will enable established companies to grow here and encourage new companies to come here. promote economic growth. In partnership with the Massachusetts Biotechnology Council. Our Research Matching Grant program. industry. Let’s keep going. We will continue to work closely with academia.Introduction by the Massachusetts Life Sciences Center There has not been a more thrilling moment in history for the Massachusetts life sciences super cluster. and cooperative research. Significant investments in infrastructure will increase the supply of necessary lab space and equipment.

articulating opportunities to enhance the community and describing threats that need to be addressed. and an educated work force—and its outputs—research. who are drawn to a cluster’s vibrant. and public funding. Around the globe. perspectives. quality of life. such as access to innovation and ease of collaboration. This report draws on economic research and the 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey. As a leader in the life sciences by many measures. and their thoughts about the biomedical industry’s strengths and challenges in the Commonwealth. brings benefits to the organizations and communities involved. More than 140 people from all sectors of the life sciences industry participated. and executives involved in global life sciences efforts. development. The report also looks at industry’s inputs—a steady stream of public and private funding.2 Massachusetts has developed a competitive advantage in life sciences since the seventeenth century. financiers. It then highlights the efforts of local researchers. wages. These articles do not represent the views of PricewaterhouseCoopers LLP. focusing on the global implications of the work being performed in the Commonwealth. and trends shaping the global impact of the Massachusetts life sciences industry . The discoveries made in Massachusetts laboratories and realized. which was first described in academic terms by Michael Porter of the Harvard Business School. share infrastructure. The concept of clustering. Being complacent with its past success is not an option. addressing the compelling features that make this region rewarding to life science practitioners.” from and about individuals in the Massachusetts’ life sciences industry. Competition from other states and countries compels the industry and government to work to ensure Massachusetts’ future success in the life sciences. Woven into the report are perspectives from key practitioners in the life sciences industry in Massachusetts.Defining the Massachusetts biomedical industry From the Massachusetts laboratory to the global marketplace The life sciences industry propels Massachusetts’ economy and sets the Commonwealth apart from many other states in the country. Clusters attract the best and brightest workers. however. How important is it to you to be working inside the Massachusetts super cluster. and have responded with the Commonwealth’s life sciences initiative. This report begins by showing how Massachusetts became a leader in the life sciences. entrepreneurs. and with its history as a center of both education and innovation. The economic analysis reveals trends related to employment. a billion-dollar investment in Massachusetts biotechnology programs and enterprises over the next 10 years. markets are opening up and patients are becoming more exposed to the medical breakthroughs and products that Massachusetts companies have to offer. the Commonwealth’s competitive advantages cannot be replicated overnight. titled “Perspective” and “Interview. and manufactured by Massachusetts businesses save countless lives around the world. economic growth. Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Super Cluster II Ideas. This growing demand has enticed a number of multinational companies to acquire or merge with promising. commercialized. and job creation. and the manufacture of innovative biomedical products. This advantage is the result of a tradition of innovation combined with clustering. State leaders recognize the industry’s massive contribution to scientific research. a practice in which inter-related organizations collaborate. collaborative atmosphere and opportunities for career advancement. Figure 1. and form synergies in geographically concentrated areas. in close proximity to other life sciences firms and supporting industries? 4% Important Somewhat important Not important 25% 71% 2 This report contains articles. innovative Massachusetts life science companies to feed pipelines and search for solutions to unmet medical needs.

to ensure that Harvard students could benefit from collaboration. Inc. venture capital. this core has spread across much of Massachusetts. a one-third square mile section of Boston. LMA. while Kendall Square represents the laboratories and discoveries of biotechnology and pharmaceuticals.Table 1. The Massachusetts life sciences super cluster includes: • The activities of universities. with burgeoning anchors emerging around Worcester and operations in Framingham. which houses some of the country’s most prestigious institutions of higher learning. teaching hospitals and research institutions • Biotechnology. LMA represents the cutting edge of medicine. and they house institutions that lay claim to some of the oldest. and this section of the cluster was born. grew up around Harvard Medical School. with several rated among the top five in the US in their respective fields. which purchased 26 acres of nearby property in 1906 and built a quadrangle of five buildings on Longwood Avenue. The two centers are less than three miles apart. and Devens. Super clusters are among the largest structures in the cosmos. LMA is home to more than a dozen life sciences organizations. The seeds of the Massachusetts life sciences cluster were sown with the founding of Harvard University in 1640 and the Massachusetts Institute of Technology in 1865. as well as some of the most recent scientific discoveries in the fields of medicine. pharmaceutical. Fall River. a super cluster is a large grouping of smaller galaxy groups and clusters. Foxboro. Natick. Harvard sold some of the remaining property to other hospitals. In astronomy. As the cluster has grown over the years. and diagnostic and instrumentation companies • Software. Life sciences-related organizations in the Longwood Medical area Hospitals and health centers Brigham and Women’s Hospital Beth Israel Deaconess Medical Center Dana-Farber Cancer Center Children’s Hospital Boston Joslin Diabetes Center Massachusetts Mental Health Center Schools Harvard University Medical School Harvard University School of Public Health Harvard School of Dental Medicine Massachusetts College of Pharmacy and Health Sciences Simmons School for Health Sciences Commercial organizations Merck Research Laboratories CBR Institute for Biomedical Research. Defining the Massachusetts biomedical industry •5 . medical device. an apt analogy for the Commonwealth’s life sciences industry. Today. On each side of the Charles River sit two of the key centers of the cluster: Kendall Square in Cambridge and Longwood Medical Area (LMA) in Boston. trade councils and associations • Specialized business services companies that contribute to the growth and vitality of the life sciences The core of the cluster is in the Boston-Cambridge area.

Today. Sum of net revenue of top 25 public life sciences companies in Massachusetts ($ Millions) $35. there are over 150 life sciences companies in this area. many with commercial importance.000 $25. more recent mini-clusters have been created north. the timeline in Figure 5 provides a summary of some of the important discoveries and milestones of the cluster. Figure 3. 2008 Super Cluster II Ideas.000 2007 2006 2005 2003 2004 Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey 2002 Source: Boston Globe Top 25 Life Sciences as of April 7th. were also drawn to the area for research capabilities and opportunities for collaborations. west. Does your institution have significant collaborations with institutions outside of the Massachusetts super cluster? Yes No 19% 81% Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Figure 4. Collaboration. MIT converted a factory into Technology Square in the 1960s. and trends shaping the global impact of the Massachusetts life sciences industry . is crucial in a world where integration of disciplines is important for the development of new clinical practices and biomedical products. As science and medicine has grown and evolved.000 $20.000 $5. when MIT moved its campus to the area.000 $15. After molecular biology breakthroughs in the 1940s and 1950s. so has the life sciences cluster.Kendall Square’s birth as a life sciences hub began in 1915. The cluster’s impact and reach continues to expand beyond Massachusetts. perspectives. What factor most strongly motivates your participation in the life sciences? Intellectual stimulation A desire to improve healthcare Money Other 45% 10% 14% Figure 2. While the original Boston–Cambridge core remains strong.000 $10. the survey showed a lack of funding for these efforts remains a significant barrier. More focus and funding are needed to foster international collaboration and expand the super cluster’s influence around the world. such as Novartis. The following decades saw top research organizations and top biotechnology firms such as Genzyme and Biogen Idec plant roots in the area. and south of Boston.000 31% $30. and how it has spread throughout Massachusetts. Respondents from the survey reported that approximately 80 percent of their institutions have working relationships outside the Massachusetts super cluster. Despite this. particularly international collaboration. Large pharmaceutical companies. Dating back to the early twentieth century with stories of innovation.

1962—James Watson of Harvard shared a Nobel Prize with Francis Crick and Maurice Wilkins. 1952—Paul Zoll of Beth Israel Hospital was the first to succeed in using electrical stimulation to restart a patient’s heart. a Harvard physicist working at Brigham & Women’s Hospital. Boston Scientific. Defining the Massachusetts biomedical industry •7 . 2007—Governer Deval Patrick announces $1 billion Life Sciences Initiative. the molecular structure of DNA. Robert Gross at Children’s Hospital. 2003—The Broad Institute. More than half a century later. and the pacemaker was born. Bovie. 2002—Novartis establishes operations in Massachusetts. for the discovery of the double helix. due in large part to the Whitehead Institute/MIT Center for Genome Research. a research collaboration among Whitehead Institute. an extremely rare condition afflicting less than 10. 1978—Walter Gilbert of Harvard and Phillip Sharp of MIT helped found Biogen. to focus on human gene research to improve healthcare. 1996—Wyeth Pharmaceuticals acquired Genetics Institute. Both men went on to receive Nobel Prizes. 1979—Indicative of the life sciences cluster spreading from its original base. Koch Institute of Integrative Cancer Research ground-breaking. 1962—University of Massachusetts Medical Center in Worcester was founded. where genomics research continues to flourish. was founded. 2006—Craig Mello. Life sciences innovation timeline 1914—Theodore Williams of Harvard University was the first of more than 30 Massachusetts scientists to win a Nobel Prize. 1985—Genzyme Corporation had its first drug. conducted research that resulted in the creation of an electrosurgical knife. Zoll Medical Corporation is still a leader in resuscitation devices. 1999—The sequencing of the human genome is completed. MIT and Harvard University. 1986—Researchers at the Massachusetts Eye & Ear Infirmary isolated the first human cancer gene.Figure 5. With a market capitalization of over $23 billion. of the University of Massachusetts Medical Center shared the Nobel Prize with Andrew Fire for their discovery of RNA interference. is formed.000 people world-wide.S. 1938—Cardiac surgery is elevated to a new level with the first successful congenital cardiovascular defect surgically corrected by Dr. becoming the first large pharmaceutical company to establish significant manufacturing operations in Massachusetts. helping to create a second anchor of the cluster in Massachusetts. illustrating a trend of traditional pharmaceuticals setting up operations in the state. approved to treat Gaucher disease. used to treat tumors that previously were considered inoperable. the first of Massachusetts’ biopharmaceutical companies. 1926—William T. 2008—David H. molecular geneticists at Harvard received the first U. which paved the way for future medical advances. the company is now the largest life sciences company in the state. Ceradase. 1988—Building on the early research in genomics. patent for a genetically altered mouse.

To be an attractive partner and find the right collaborators elsewhere. Identifying and building bridges to the right partners is a new role that cluster initiatives are starting to play.Perspective Massachusetts life sciences—locally linked. Far from being a sign of weakness. 8• . They have benefited from what they found here. however. this can help the cluster focus on what it does best: combine the skills and capabilities of many partners to deliver world-class results. you need to know what specific value you provide. The impact of globalization does not stop there. Companies have learned this lesson. That’s why strong local linkages need to be supplemented by well developed global connections: clusters become stronger if they have well established ties to clusters elsewhere that provide complementary functions. in clusters where later stage clinical tests can be done more efficiently or where particular research strengths add to Massachusetts’ capabilities. in fact. they have made a significant contribution to the cluster’s success. the cluster would not be what it is today. based on a clear understanding of where the Massachusetts cluster aims to position itself. Competing internationally might look like a game where everybody is running the same race. It might now be the time to complement these efforts by building targeted partnerships with other clusters. More importantly. but more attractive. The initiatives in the cluster have so far focused on strengthening the local linkages and marketing it to a national and international audience. Without them. The experience of many clusters suggests. not all the necessary capabilities can be attracted. But the Massachusetts experience also indicates that more can be done to square the local with the global to the benefit of the cluster. not substitutes. Stronger local linkages make a cluster not only more competitive. globally connected By Christian Ketels Christian Ketels Harvard Business School Does it make sense to focus on strengthening local linkages when competition in life sciences is so clearly global? The experience of the Massachusetts life sciences super cluster gives a resoundingly positive answer: local linkages and global connections are complements. in other parts of New England where manufacturing can be done more efficiently. Christian Ketels is a member of the Harvard Business School faculty at the Institute for Strategy and Competitiveness. Collaborating internationally shows that. Others might be far away—for example. The Massachusetts life sciences super cluster is in the enviable position of having strong local linkages as well as many global connections. success is about defining your own race. it is now increasingly also heard in clusters. The Massachusetts life sciences super cluster has attracted numerous researchers and companies from other parts of the US and abroad. Some of these other clusters might be in the neighborhood—for example.

and assists our local organizations in reaching out to the world. Massachusetts is a strategic gateway into the US life sciences community of researchers. • Participation in world life science forums: our researchers participate in countless scientific conferences and our companies are found in nearly every trade show. Massachusetts’ super cluster is positioned to connect the world of life sciences in many ways: • Cross border collaboration: Our industry. and China. and places special emphasis on fostering life sciences research and commercial collaborations. and institutions reach far beyond the state for partners. academia. which actively facilitates biotechnology transnational technology transfers among six European Union regions and North America. Pacific Rim.Perspective Strategic economic development built upon international collaborations By Christa Bleyleben Christa Bleyleben MOITI Succeeding in today’s biotechnology industry requires strategic global reach to access ideas. Massachusetts’ super cluster has a history of welcoming ideas and working with the best talent from around the globe. companies. West Coast. As the official Commonwealth agency focused on international relations. Defining the Massachusetts biomedical industry •9 . scientific collaborators. and numerous foreign trade organizations have a presence in the state. This win-win economic development philosophy is evidenced by Massachusetts’ creative programs that help companies work together across national boundaries to develop products that benefit everyone—actions that go far beyond traditional government incentives. Latin America. For example: —The University of Massachusetts. and investors. Christa Bleyleben is executive director of the Massachusetts Office of International Trade and Investment. and New York investment firms maintain offices in Massachusetts. the Massachusetts Technology Transfer Center and Tsinghua Hebei-Langfang Institute have established the Massachusetts Technology Transfer Base in Hebei. MOITI helps our local companies participate in trade shows such as the major medical device conventions of MEDICA in Germany. and markets. More than 50 nations maintain consulates here. MOITI itself has locations in Europe. and CMEF in China. the Massachusetts Office of International Trade and Investment (MOITI) helps those from outside the region access our rich life sciences super cluster. • Access to investment capital: Massachusetts contains a vibrant native financial and venture capital community. MOITI administers all of Massachusetts’ international agreements. In addition many European. Many of the world’s leading life sciences companies are located in Massachusetts. Arab Health in Dubai. —Massachusetts is the US gateway for the European Union’s Transbio project. —Massachusetts and the Lombardy province in Italy are collaborating on developing international clinical trial capabilities and are bringing metabolic disease researchers together from our regions. As part of Massachusetts’ Business Resource Team. This heritage inspires MOITI to practice a new style of economic development: one that is driven by collaboration rather than competition. The recent trade mission to China by Governor Deval Patrick with leaders of our companies and universities demonstrates our interest in engaging everyone in life sciences. manufacturing expertise. we can also help provide access to the Commonwealth’s many life science incentive programs. from cultural to economic. • International physical presence: Massachusetts organizations have facilities throughout the globe.

It is also an instrumental investor. Small Business Administration (SBA) programs help small companies compete effectively and bring new technologies to market. in turn. Grants from the National Institutes of Health (NIH) provide the funding for studies and laboratory research that lead to new medical breakthroughs—which.Technology and entrepreneur development The federal government is not just an important partner for Massachusetts’ life sciences industry. . spur new jobs and economic growth for the region.

Figure 6 shows that the District of Columbia received the second highest level of funding. Massachusetts was number one in NIH funding in 2006. Massachusetts 3.273 $2. followed by Maryland. Rhode Island. California 2.204 $1.898 $1. Massachusetts has not been immune to this issue. Office of Extramural Research Technology and entrepreneur development • 11 .714 $1. the primary federal agency that funds health and biotech research.536 $1. Ohio Source: National Institutes of Health.207 $1. and Texas. North Carolina 8. Office of Extramural Research Figure 7.177 ($ millions) Compared on a per capita basis. Illinois 10. Top ten NIH grantee states—fiscal year 2006 Rank & State 1.143 $2.356 $1.077 $999 $933 $813 $694 $627 Source: National Institutes of Health. There are two ways to compare Massachusetts against other states for NIH funding. 2000 1999 1998 Source: National Institutes of Health. ranking behind California but ahead of New York .872 $1.Public funding NIH Funding How much NIH funding does Massachusetts receive? The NIH. These five states each received over $1 billion in NIH funds. as illustrated in Table 2. Pennsylvania 5. Texas 6. New York 4.204 $2. and research contracts to Massachusetts-based organizations in 2006. Figure 6.264 $2.392 $1. the Commonwealth was number two in 2006. and Connecticut. NIH funding for Massachusetts 2006 2005 2004 2003 2002 2001 $2. DC Maryland Rhode Island Connecticut Washington Pennsylvania Vermont North Carolina $123 $129 $128 $112 $102 $105 $98 $178 $343 $316 Table 2. Maryland 7. 2006 NIH funding per capita Massachusetts Washington. a 29. Washington 9. fellowships. gave $2. Office of Extramural Research New York ($ millions) Amount of funding received $3. NIH funding has stagnated nationally in recent years. Pennsylvania. as illustrated in Figure 7.4 percent increase from five years ago. In terms of absolute dollars.2 billion in grants.

Boston University Medical Campus 6. circumscribed project to be performed by the named investigator(s) in an area representing the investigator’s specific interest and competencies. specified. Massachusetts’ share of NIH funding by funding institute. • The success rate of an R01 grant application when first submitted is only 12 percent today. Lung and Blood Institute funded $268 million.204 % MA share 18% 15% 12% 8% 8% 6% 4% 4% 4% 24% 100% Research grants represented the lion’s share of NIH funding in Massachusetts in 2006: the agency awarded 4. The remaining funds went to 342 fellowship grants. Beth Israel Deaconess Medical Center 7. Tufts University Boston 12. Brigham and Women's Hospital 3. down from 29 percent in 1999. down from 29 percent in 1990. Harvard University 15. and Pensions. University of Massachusetts Medical school.467 such grants. only about 20 percent of grants will ultimately be funded. 188 training grants. the National Heart. as shown in Table 3. and a way for researchers to establish credibility. based on the mission of the NIH. which is considered the premier NIH grant. Nine institutions. Fifteen largest NIH grantee institutions in Massachusetts. Lung. March 11. and trends shaping the global impact of the Massachusetts life sciences industry . Office of Extramural Research Where do the NIH funds go? Massachusetts General Hospital was the biggest beneficiary of NIH funds in 2006. 2006 Institute National Institute of Allergy and Infectious Diseases National Cancer Institute National Heart. • The percent of R01 grants that will go to first time investigators was 25 percent in 2007. The National Cancer Institute funded $335 million. Table 4 lists the state’s largest NIH grantees. 4 Super Cluster II Ideas. Dana-Farber Cancer Institute 8. Children's Hospital Boston 11. Massachusetts Institute of Technology 4. Table 4. 3 The R01 grant is an award made to support a discrete. perspectives. • Rejected grant proposals may lead to downsized labs. 3 construction grants and 12 other awards. is 43 years old up from 39 in 1990. slipping morale. Education. Harvard University (Medical School) 5. and Blood Institute National Institute of Diabetes and Digestive and Kidney Disorders National Institute of General Medical Sciences National Institute of Neurological Disorders and Stroke National Human Genome Research Institute National Institute on Aging National Institute of Mental Health All Other Institutes Total—All Institutes ($ millions) MA amount $388 $335 $268 $181 $179 $133 $97 $90 $89 $527 $2.2 billion Massachusetts researchers competed successfully to win that year. Recent trends suggest researchers. New England Medical Center Hospitals 14.Where do the NIH funds come from? Out of the 27 different agencies that make up the NIH.4 Source: National Institutes of Health. Labor. 2008. and more conservative proposals geared toward winning future grants. receiving a total of $301 million. funding $388 million in research. Worcester 10. Boston University 13. accounting for about half of the $2. Harvard University (School of Public Health) 9. especially young researchers. • After multiple submissions and a protracted process. the National Institute of Allergy & Infectious Diseases was the most active in Massachusetts in 2006. Massachusetts General Hospital 2. each received over $100 million. including the Massachusetts Institute of Technology and the medical and public health programs at Harvard University. These four institutes represented the largest sources of NIH funding in 2006. layoffs of postdoctoral students. Drew Faust Testimony before Senate Committee on Health. Office of Extramural Research ($ millions) Award $301 $241 $184 $166 $129 $129 $128 $116 $109 $92 $66 $50 $47 $44 $41 Table 3. and the National Institute of Diabetes and Digestive and Kidney Disorders funded $181 million. Boston Medical Center Source: National Institutes of Health. are having a difficult time securing NIH grants— especially prestigious R01 grants3: • The average age of a first-time recipient of an R01 grant. fiscal year 2006 Rank 1.

years of flat funding from NIH are deterring many young scientists from entering pediatric research. mostly adults. heart and respiratory disease. Judah Folkman pioneered angiogenesis at Children’s. and today more than 1. Stopping disease in its infancy has tremendous potential for extending productive human life and significantly reducing health care expenditures. However. The emergence of new pediatric disease epidemics. sharing insights and knowledge. but only an estimated five percent of National Institutes of Health (NIH) research funding is directed to children’s diseases. is chief of hematology/oncology and director of Translational Research at Children’s Hospital Boston. pose new threats to human life and longevity. The economies of scale realized by establishing common protocols. Our ability to identify genes that are responsible for disease creates an extraordinary opportunity to predict at-risk people and potentially intervene at an early age in preventing diseases or their complications from emerging in adults. our researchers are at the forefront of applying stem cell therapies to treat cancer and blood diseases in adults as well as children. Williams. David A. As one of the world’s leading pediatric research centers. Too many children are dying each year from diseases that are within our grasp to cure— children whose untold potential is lost. the capacity to use this newfound knowledge is limited not only by inadequate and declining support of pediatric research but by how that research is organized. and pooling patients for clinical trials will accelerate basic research and speed the translation of treatment from bench to bedside. Children’s Hospital Boston is a case in point. The completion of the sequencing of the human genome has opened a treasure trove of information on the biological and genetic bases of disease. Type II diabetes. only a handful of pediatric hospitals like Children’s have research enterprises of sufficient breadth and depth to fully exploit the opportunities in genomic and proteomic research. with more than 1. Advances in treating childhood forms of disease have been instrumental in developing new adult therapies.Perspective Ushering in a new age of biomedical research By David A. In addition. are receiving angiogenic therapies for cancer and macular degeneration.2 million patients.500 scientists and a research budget of $177 million. Williams David A. Williams Children’s Hospital Boston As any parent can tell you. Technology and entrepreneur development • 13 . organized around major pediatric research hospitals. children are not just small adults. Despite the fact that children have dissimilar needs than adults—and they may hold the key to unlocking the cures to some of the deadliest diseases—biomedical research continues to undervalue pediatric research. The Pediatric Research Consortia Establishment Act being considered by Congress would establish regional pediatric research networks of scientists and institutions conducting pediatric research. The late Dr. MD. we now understand that many of the deadliest adult diseases—including obesity. robbing our country of future investigations in this field. and their bodies do not respond to therapies in the same way. helping to usher in a new era of pediatric research with limitless possibilities for extending and enhancing the quality of human life. mental illness and even addictive behaviors—have their origins in childhood. such as Type II diabetes and asthma. It is vital to the long-term health of the entire population that this trend be reversed. As there are only a relatively small number of sick children. their biological systems are different from adults. Children represent 20 percent of the population. To make matters worse.

firms must be based in the United States and have 500 or fewer employees. The SBIR program is designed to help high technology companies. National Aeronautics and Space Administration. Life sciences patents issued per 100.9 $4. but they play a critical role in moving research from the laboratory to the commercial sphere. For both programs. and trends shaping the global impact of the Massachusetts life sciences industry . medicines. Companies in the Massachusetts life sciences cluster benefit from the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. targeting small firms and nonprofit organizations working in partnership with research organizations to bring innovations to market.2 $82. such as the Department of Defense.44 5.5 $1. The STTR program is similar.48 8.4 $76.1 $57.3 $6. and National Science Foundation.53 8.5 Table 5.000 people State Massachusetts New Jersey California Maryland Pennsylvania North Carolina New York US Total Life sciences patents 999 735 3. fiscal year 2006 SBIR Phase I Phase II Total STTR Phase I Phase II Total Total SBIR and STTR Source: NIH Office of Extramural Research ($ millions) $19. The various federal agencies that have their own research and development programs.Small business administration funding What are the SBIR and STTR programs? Just as the NIH invests in groundbreaking research and pioneering ideas that may pave the way for new cures.7 Table 6. are required by law to set aside funds for SBIR and STTR grants.681 Life sciences patents per 100. 2006 Figure 8. perspectives. and lifesaving techniques.028 417 621 284 597 6. develop their research into commercial products and services. NIH SBIR and STTR grants to Massachusetts. Super Cluster II Ideas.000 people 15. including life sciences firms.20 3. SBA funds represent just a sliver of total NIH funding. which are both administered by the SBA’s Office of Technology.24 Source: Patent and Trademark Office.10 2.35 7. the SBA competitively distributes federal research grants to small enterprises with the potential to bring these innovations to market.01 3. How effective is your organization at spinning off or commercializing new ideas that do not fit its core mission or business lines? Effective Somewhat effective Not effective 28% 9% 63% Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey 5 This report examines the SBIR and STTR grants funded by the NIH.

Worcester Polytechnic Institute Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey How much SBIR and STTR funding does Massachusetts receive? Massachusetts companies received $82. Tufts University 5. while Phase 2 provides $750. Table 7 shows survey respondents’ rankings of the ease of establishing working relationships with various technology transfer offices in Commonwealth academic institutions.72 $1. A crucial aspect of commercialization is the ability to harness new technologies developed at universities and academic institutions. Dana Farber Cancer Institute 4. Ease of establishing a working relationship with university technology transfer offices—Top 5 1.48 per capita.48 ($ Millions) Figure 9. the company is eligible for a $750. The Phase 1 test is expected to take six months.7 $118. especially when the funding is measured on a per capita basis.5 Per capita funding $12. In 2006. as shown in Table 6. 2006 State Massachusetts California North Carolina New Jersey New York Source: NIH Office of Extramural Research SBIR & STTR funding $82.9 $28. 34% 66% Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey How does Massachusetts compare to other states for SBIR and STTR grants? Massachusetts compares favorably to other large states known for life sciences and technology research. Per capita NIH SBIR and STTR grants. California received $118.1 $16. University of Massachusetts 2. In comparison.4 million for Phase 2 funding. Table 8. or $12. Massachusetts companies received a total of $76.7 million in NIHrelated SBIR and STTR grants in 2006. and if it is promising. The SBA awarded a total of $1.000 for more comprehensive marketability and commercialization testing. but survey respondents said Commonwealth institutions could further improve their ability to commercialize new or radical ideas.Table 7. University technology transfer offices play an important role in this step.5 million. and New York received $28.9 million in Phase 1 NIH STTR grants and $4.26 $2.3 $24.000 Phase 2 grant to continue testing commercialization over a two-year period.84 $3. as shown in Table 5. or $1.000 and allow a year for feasibility testing. and $57. as shown in Table 8. select states. the Commonwealth received $82.5 million in NIH SBIR grants in 2006. Massachusetts Institute of Technology 3.1 million in Phase 1 funding. in combined NIH SBIR and STTR funding. in producing inventions that prove worthy of patents. as illustrated in Figure 8. A company typically receives a Phase 1 SBIR grant to explore the possibility of turning new research into a new product or service.95 $1.3 million.84 per capita. Do you consider yourself an entrepreneur? Yes No Innovation in Massachusetts Massachusetts continues to lead the nation.26 per capita.3 million in Phase 2 grants to Massachusetts firms and nonprofit organizations in 2006. The Phase 1 grants are typically for $100. Technology and entrepreneur development • 15 . on a per capita basis. or $3.7 million. This figure includes $19.

entrepreneurs and their angel and venture investors are needed to bridge the gap—and take the first steps toward development. the great majority of new companies in Massachusetts in the bio/ medical space were founded. This technology transfer from universities through patents and licensing has been notably effective in biotechnology. of the 120 or so licenses MIT grants each year to its patents. and engineering principles to address disease and improve food and clean energy production. Finally. strategic partnerships between the startup company and large pharmaceutical or energy companies complete the chain. These startups are themselves a critical link in the biotechnology chain: frequently. Business schools are offering individual courses and entire degree programs in entrepreneurship.g. Later. formed specifically to develop the technology. This includes ten to 15 licenses each to startup companies in the biotechnology field. Instead. 16 • . Universities in Massachusetts have also been playing a part in developing entrepreneurial eco-systems: environments in which researchers and students learn the skills of technology entrepreneurship and mix with the business and investment communities. with hundreds of millions of dollars in investment needed—and no guarantee that the investment will be successful. they must first be transferred to the commercial sector for investment in development into products. the MIT Venture Mentoring Service and First Founders at Boston University) provide guidance to new entrepreneurs. and an untold number of venture clubs and networking organizations throughout the region provide numerous opportunities for connections between people that lead to companies.Perspective Crossing the bridge from academia to industry—technology transfer in biotechnology By Lita Nelsen Lita Nelsen MIT Technology Licensing Office Massachusetts is rich in universities and research hospitals where basic research leads to a fundamental understanding of cellular processes in health and disease and to discovery of new compounds. The research institution could now provide an incentive for early investment by licensing its patent to a first mover company willing to take the risk. Lita Nelsen is director of the Technology Licensing Office at the Massachusetts Institute of Technology. approximately 30 percent are in biotechnology. at least in part. but that of the future. the patent would protect the final product from copycats. students are continuously exposed to them as role models—and the students come to believe that they can (and will) do it themselves some day (if not now)! The universities are building not only the biotechnology industry of the present. mentoring services (e. the long-range vision and risk-tolerance of scientific founders. This is particularly challenging in the biotechnology field. Patents are one key to meeting this challenge. since it may take a decade or more to move from a research finding to a product. then. in technology licensed from universities or research hospitals. In fact. success breeds success: as more and more scientists and faculty engage in bringing their research findings into commercial reality. The BayhDole Act of 1980 allowed research institutions to own the patents arising from research funded by the federal government. the research findings from universities are at too early (and too risky) a stage to attract the attention of large companies. materials. For example. if the company’s development was successful. But in order to bring these findings into public benefit. Community-oriented organizations such as the MIT Enterprise Forum educate working entrepreneurs.

and diagnostics. resisting the more risky research in order to increase their chances of receiving federal grant support. bioengineering. and many projects that have received early funding are being halted due to a lack of funding. Fewer dollars mean more competition for scarce resources and stricter guidelines by which NIH reviewers are examining applications. and cell biology is threatened. Encouraging creativity and innovation by our top investigators in many fields is critically important. engineering. but flat funding from the National Institutes of Health since 2004 and restrictions on federal funding for certain types of research is threatening the development of life changing therapies and cures for many diseases. Technology and entrepreneur development • 17 . The Massachusetts Life Sciences Center (MLSC). Massachusetts. and computer science are collaborating with biomedical scientists to make significant advances in disease-related research. Other state governments would do well to share in this commitment—increasing economic development while simultaneously benefiting the quality of human life. and a professor of biology and bioengineering at the Massachusetts Institute of Technology. I am proud of the work that we are doing to promote economic growth and improve health outcomes in Massachusetts. Notably. created in 2006 by the legislature and invigorated by a recent $1 billion life sciences initiative. This tighter level of scrutiny is forcing many of our brightest and most promising junior and senior researchers to play it safe. it is often the risky projects that yield the greatest developments for positive medical outcomes. and to provide advice on future programs that could increase life sciences research and education in the Commonwealth. The Massachusetts Life Sciences Center is not attempting to replace or replicate the role of the National Institutes of Health. therapies. Harvey Lodish is chair of Scientific Advisory Board for the Massachusetts Life Sciences Center.Perspective The role of state government in promoting innovative research in the life sciences that can lead to new medical treatments By Harvey Lodish Harvey Lodish Massachusetts Life Sciences Center Significant advancements in biomedical research are frequently made by very young investigators who have new insights into old or intractable problems. researchers trained in fields such as mathematics. and incentivize cooperative partnerships between industry and academia. attract new. research. As chair of the SAB. This critical gap in financial support has proven a disincentive for innovative and groundbreaking discoveries. nationally prominent faculty to the state’s higher education institutions. and healthcare institutions—has proportionally more to lose if we squander the talent in our brightest young scientists and engineers. nor does it have resources that would enable it to come close to doing so. He is also a member of the Whitehead Institute for Biomedical Research. The MLSC created a Scientific Advisory Board (SAB) to ensure the state’s money is spent on the most promising people and projects. has launched its first programs to spur innovative research by new investigators. with promise for solid economic development and job creation. Increasingly. or funding levels that are not keeping up with inflation. Progress in areas like genomics. will enable the Commonwealth to leverage its own limited resources while furthering discoveries in new medical applications. perhaps more than any other state—with our world-class academic. But the MLSC’s commitment to funding innovative basic and translational research.

On the importance of personal contacts Even with the Internet and other means of transferring knowledge. On Massachusetts’ knowledgeable investors Massachusetts has thrived as a center of innovation not only because there is a tremendous amount of talent in its medical and academic institutions but also because there is a vibrant community of intellectually powerful investors here. and I was fortunate to be a part of the human genome mapping and sequencing program. I’d been commuting from New York to come to scientific meetings. we don’t have an equally good understanding of the regulatory systems elsewhere. On managing global regulatory regimes All of these markets are becoming so global that we need to think about how the discoveries that we make can indeed be exported to other countries. As it happened. On reaching out globally Entrepreneurs should keep their minds focused not just on local markets but also on international markets. so the proximity is very important. board meetings. and be close to the company that I was very heavily involved in. If you want to try to make a deal with somebody or to collaborate with somebody. but also the atmosphere in other parts of the world. The opportunity to work in Boston. they are very interested in medically related pursuits and very receptive to supporting these activities. which was very exciting. Entrepreneurs should take advantage of that. I had been one of the scientific founders of Millennium Pharmaceuticals in 1993. In addition. was also tremendously attractive. there’s really nothing that substitutes for the ability to be able to see and talk to someone in person. And I was asked to come to Boston and to head this effort. While we have a great amount of experience with dealing with regulatory agencies in Europe. and so on. 18 • . For example. They were interested in establishing a collaborative effort to explore exactly those opportunities in a strong clinical setting. Harvard Medical School and hospitals affiliated with Partners Healthcare have been thinking independently about the same goal of trying to bring genetics to the clinic. While there is incredible talent here. And that means that we need to know more about the regulatory atmosphere not only in this country. and they are not intimidated by technical subjects. They are highly sophisticated and deeply knowledgeable. It illustrates how this super cluster concept can build on itself.Interview Raju Kucherlapati On how I came to Massachusetts I was at Albert Einstein College of Medicine in New York. Mass Insight is trying to build these kinds of bridges between Massachusetts on the one hand and India and China on the other. We need to build that capability. and served on the board. They can understand the vision behind the research. they also should think about how to be able to fully leverage all of the talents that are really available around the world. then it’s important to be able to talk to them. One of the things I realized was what a great opportunity we had to apply the lessons of the human genome sequence directly to patients.

Millennium Pharmaceuticals. but something has happened over these last seven or eight years. On change in the winds The Bay Area and Boston have long been the places to be for biotechnology in this country. Dr. Previously. one of the attractions certainly was the fact that Millennium is based here in Boston. Kucherlapati was a member of the editorial board of the New England Journal of Medicine and is a leading contributor to scientific literature. While the transaction made sense on many levels. just merged with Takeda Pharmaceuticals in Japan. the company that I’ve been associated with. Kucherlapati was chairman of molecular genetics and a professor at Albert Einstein College of Medicine in New York.Raju Kucherlapati is scientific director of Harvard-Partners Center for Genetics and Genomics and Paul C. in a center of the life sciences. to the best of my knowledge. Things are shifting here. Boston has really attracted all of these big pharmaceutical companies and. Technology and entrepreneur development • 19 . nothing like that has happened in the Bay Area. Dr. For example. Cabot Professor of Genetics and a professor of medicine at Harvard Medical School.

The spirit of Yankee ingenuity has converted old mills and warehouses into high tech hothouses to give them good places to innovate. competition. There can be no higher calling. Ken Morse is executive director of the Massachusetts Institute of Technology Entrepreneurship Center. 20 • . have taken root here because our scientists and engineers believe in commercial success through excellence. Our job here at the MIT Entrepreneurship Center is to train entrepreneurs to be capable of moving from medical research to sustainable success. large and small. Over 150 biotech companies. Our world-class universities and global life science companies are the magnets which attract the talent needed to fuel invention. Commercialization requires passionate. The critical role of our ambitious entrepreneurs is to build powerful teams around the inventors and achieve the many milestones from bench science to bedside. preclude bureaucracy. and entrepreneurship. complacency. and mediocrity. and collaboration where entrepreneurs are encouraged to lean over the fence and borrow a cup of sugar (or other carbon source) from their neighbors. measured by improving healthcare and saving lives on a global scale. and the entrepreneurs within it. New companies are benchmarked against the best and most successful players. The power of our super cluster. The Massachusetts biotech cluster is a community with a culture of creativity. workaholic entrepreneurs who believe that the job of invention is not complete until breakthrough technologies are coaxed from the comfort of the lab to the crucible of the marketplace. By definition: innovation = invention + commercialization.Perspective The role of entrepreneurship in building a biotech cluster By Ken Morse Ken Morse MIT Entrepreneurship Center It takes a village to foster breakthrough technologies and create great companies.

At the BIO 2007 convention held in Boston last spring. The Commonwealth’s competitive advantage is diminishing as businesses and talent are increasingly attracted to other locations. office. and real estate resources • Establish educational networking forums to highlight Biotechnology. a comprehensive and extensively documented international cell database. loan guarantee. and the international biomedical research community with access to critical information on cell lines to facilitate greater development of research and the commercialization of science. The Governor and the entire Massachusetts Legislature have been extremely forward thinking in their support and pursuit of growth within the life science industry. Other states have invested more money in funding research and development. Innovation by way of the promotion of biomedical incubator facilities for startup companies in Central Massachusetts has also been an integral part of the Commonwealth’s emphasis on the implementation of a statewide strategy to compete within the life sciences global economy. But other states and nations are nipping at our heels. Kevin O’Sullivan is president and chief executive officer of Massachusetts Biomedical Initiatives. This webbased registry would provide Massachusetts researchers. we continue to strive to fund cures for lifesaving medical therapies—and ultimately an enhanced standard of living throughout the entire world. commercial entities. The University of Massachusetts Medical School in Worcester proposes to establish the Massachusetts Human Embryonic Stem Cell Registry. That is why the Massachusetts’s life science legislation is so important to our economy as well as in bolstering our continued leadership within the healthcare field. Benefits include new jobs and the attraction and the retention of the best scientists in the world. scientific. dozens of regions aggressively targeted our companies and our talent. Most importantly. The Central Massachusetts region has continued to grow our life science cluster and is recognized as the anchor to the burgeoning biomedical corridor between Worcester and Boston. Technology and entrepreneur development • 21 . This legislation helps to expand tax incentives for life science companies doing business here in Massachusetts. we remain the very best in the world. and science-related activity within the region. Several key goals have been embraced by this statewide economic development effort on behalf of seed life science companies: • Create a higher profile for Worcester and Central Massachusetts as a place to establish and grow the medical industry business • Establish a lifeline with venture capital funds to match prospective companies with specific angel and VC fund opportunities • Promote the function of technology transfer and licensing to create more opportunities for the commercialization of science • Work to create more affordable science-related incubator lab. academic. By implementing this unified agenda. as the first phase of a broader Massachusetts initiative. tax incentive. The future for life sciences within the Worcester region and the entire state is bright and the potential is boundless. and healthcare engine for continued growth in central Massachusetts By Kevin O’Sullivan Kevin O’Sullivan Massachusetts Biomedical Initiatives We all agree that the Massachusetts life sciences industry holds tremendous potential for our future. Other states have invested more in stem cell facilities and research. Medical Device and Informatics business. and light manufacturing space to meet this growing real estate need • Market attractive and diverse financial and real estate packages to grow and attract biomedical companies by assembling grant. It provides badly needed infrastructure improvements to our public university system.Perspective Projecting tactics and message—promoting startup companies as an economic.

Early stage company development Super Cluster II Ideas. perspectives. and trends shaping the global impact of the Massachusetts life sciences industry .

This dilemma creates a gap in available funding. Direct. Recognizing that innovation happens everywhere. While $50. The Massachusetts Life Science super cluster has exhibited phenomenal success. and you do not have a means to measure where you are.Perspective Accelerating academic research to solve real problems—a story of academic innovation and the translation of ideas to impact By Charles L. Ignition grants are aimed at projects that are two to three years from commercialization.000. At MIT we developed a curriculum around linking technological innovation to the market. Connecting the academic investigators with both the market and the venture finance community is the third leg of success. we call these innovation teams or I-Teams for short. MIT Leon Sandler Deshpande Center for Technological Innovation. invention. that funding sources perceive the mission of academic research to be more about knowledge creation rather than solution of commercial problems. The ideas bubble up from the caldron of basic research on campus that is largely funded by government and industrial sponsors. Through a generous gift from Desh and Jaishree Deshpande. and impact.000 is a modest amount.000. and Leon Sandler is executive director. Sustaining this success will depend on how well it can access innovation in the life sciences—not only using local resources. Cooney Deshpande Center for Technological Innovation. experienced volunteers from the business community who—just like a chemical catalyst—serve to accelerate the process of translating ideas to impact without themselves participating in the process. if successful. and Connect. however. Early stage company development • 23 . If you do not know where you are going. draw upon not only our local but also global innovation. often called the Valley of Death. multi-institutional and multi-country teams to capture early stage ideas that can be translated to solutions of local problems in different locations. innovation. Funding for academic research is not intended to take the ideas to commercialization. At this point the technology is spun out of the university. one can assess both technical and market uncertainty and decide if a second year of funding. then you will not know when you arrive—thus developing the go-to-market strategy is essential to success in achieving impact. There is a problem. we selected about 75 projects from over 400 proposals and have so far seen the creation of 15 new companies that have attracted about $140 million in venture financing and created over 200 jobs.000. we were able to create the Deshpande Center at MIT to address this gap and to stimulate the connection of ideas. A parallel problem is that the industrial community is often hesitant to assume the risk of early stage academic research in seeking marketable products and services. the next challenge is to learn how to create and manage multidisciplinary. We need to understand the problems. MIT In 2002. We award two types of grants: Ignition grants of up to $50. and engage the community in this quest to bring new science to both old and new problems. of the Deshpande Center for Technological Innovation at the Massachusetts Institute of Technology. Cooney is faculty director. will address an important problem and can be commercialized within a few years. we also include mentoring with catalysts. The challenge is to develop a go-to-market strategy for early stage ideas. is likely to reduce the technical and market uncertainty to the point that one can attract venture financing or license the IP. Venture capital that might fill this void is constrained by the concerns of uncertainty in early stage academic research. up to $250. In conjunction with funding of these proposals. it allows one to test the hypothesis and begin to explore potential for the technology. the Deshpande Center for Technological Innovation was established at MIT to accelerate the translation of early stage ideas to realization of commercial impact. while Innovation grants are directed toward projects that are just one to two years from commercialization. This experience is an essential component of the funding model and differentiates such funding from normal project support. The model that evolved from our work over the past six years is called Select. Cooney and Leon Sandler Charles L. Over the first five years of funding. but tapping the power of the Massachusetts innovation ecosystem to address global science and solve global problems. and Innovation grants of up to $250. One needs a peer review process to select early-stage research from academic researchers that. Within one year. Charles L.

Minot Physiology or Medicine Harvard University 1961 Georg von Bekesy Physiology or Medicine Harvard University 1962 James Watson Physiology or Medicine Harvard University 1964 Konrad Bloch Physiology or Medicine Harvard University 1953 Fritz Lipmann Physiology or Medicine Massachusetts General Hospital 1965 Robert B. Massachusetts Nobel laureates 1914 Theodore W. Richards. Luria Physiology or Medicine Massachusetts Institute of Technology 1975 David Baltimore Physiology or Medicine Massachusetts Institute of Technology Super Cluster II Ideas. and trends shaping the global impact of the Massachusetts life sciences industry . Murphy Physiology or Medicine Harvard University George R. perspectives.Translating research dollars into results Figure 10. Weller Physiology or Medicine Research Division of Infectious Diseases Children’s Medical Center 1969 Salvador E. Enders Physiology or Medicine Research Division of Infectious Diseases Children’s Medical Center Thomas H. Woodward Chemistry Harvard University 1967 George Wald Physiology or Medicine Harvard University 1954 John F. Chemistry Harvard University 1934 William P.

Cormack Physiology or Medicine Tufts University 1987 Susumu Tonegawa Physiology or Medicine Massachusetts Institute of Technology 1976 William Lipscomb Chemistry Harvard University 1986 Dudley R. Schrock Chemistry Massachusetts Institute of Technology 1979 Allan M. Murray Physiology or Medicine Brigham and Women’s Hospital 2005 Richard R. 1995 Mario J. which have saved countless lives and opened up new possibilities for understanding and treating disease. This history of scientific excellence is a key reason why Massachusetts receives more NIH funding per capita than any other state. Robert Horvitz Physiology or Medicine Massachusetts Institute of Technology Early stage company development • 25 . As the timeline below illustrates. Numerous Massachusetts scientists have received Nobel Prizes for their seminal discoveries. Sharp Physiology or Medicine Massachusetts Institute of Technology Center for Cancer Research Richard J. Mello Physiology or Medicine University of Massachusetts Medical School 1993 Phillip A. the biomedical researchers of the future will be standing on the shoulders of these giants.The public funding of life sciences research in Massachusetts has resulted in numerous biomedical breakthroughs over the past three decades. Roberts Physiology or Medicine New England Biolabs 1980 Baruhj Benacerraf Physiology or Medicine Harvard Medical School Walter Gilbert Chemistry Lyman Laboratory Harvard University 1990 Elias James Corey Chemistry Harvard University Joseph E. Molina Chemistry Massachusetts Institute of Technology 1981 David H. Herschbach Chemistry Harvard University 2002 H. Wiesel Physiology or Medicine Harvard Medical School 2006 Craig C. Hubel Physiology or Medicine Harvard Medical School Torsten N.

If I get up in the morning and say. Ultimately. it still is a challenge to develop these products. but it is a much more established and knowable industry now than it was 30 years ago. On what motivates him A most stimulating way to spend one’s day is working with and learning from young scientists and encouraging them to do important work. so that we can target these particles to cells. what the international market is doing—I cannot imagine an area that is more exciting to be part of. When they get their first position. On advice for young entrepreneurs in the life sciences This is not an unusual conversation for me at MIT. but not much longer than that. It grew partly out of genomics where engineering and molecular biology met in doing the human genome sequence. Today. On crosscutting among the sciences and engineering Engineering and biology at the cellular and molecular levels have begun to merge. biotech was just a word. well. When we started back in ’78. maybe two. “what am I going to do today. we became profitable. That gave us the capital to develop and grow. They not only need to know what their specialty is and become world leaders at it but they would also have to set it in the context of what the whole industry is doing. they should set their knowledge base in as broad a context as they can. 26 • . this will last a year. Sharp On the early days of biotechnology in Massachusetts Back in 1978. invest in it. So. Third. What I tell them first is that they have to get to know the industry and the people in it. establish a freestanding organization and fund it long enough to take a technical development along to pharmaceutical approval. a learning environment is a very important thing. it will last two or three years. And then after two or three years they said. what healthcare is doing. The second thing is that they need to network.Interview Phillip A. Many people here in the biotech and pharmaceutical world in New England are the best scientists anywhere. everyone looked at it and said. or trying to get a new venture off the ground or working with a group of bright young people to make something happen— that is what I find most interesting and an incredibly stimulating and satisfying way of spending one’s life. there was no one experienced in biotech as an endeavor. So it was a whole new concept to take promising laboratory-based research. oh. It is really very exciting. not an option. What made it have continuity was that Wall Street became comfortable with the concept that these technology companies could be financed on IPOs in a pre-profit situation. We are optimistic that this merging of engineering and biology will translate into therapies that will make healthcare better and cheaper. I think that only one freestanding pharmaceutical company had been started in the previous 50 years. They need to find an opportunity that will teach them the broader aspects of what they are doing and the business they are involved in. This is a “people” business. and then very profitable.” and I have the option of trying to understand something new. Now we are beginning to see engineering with nanotechnology creating nanoparticles that are much smaller than cells. and that is a phenomenal change that has happened in the last decade. learning from others and getting to know what they are doing and what their aspirations are is a must.

Phillip A. Sharp is Institute Professor at the Massachusetts Institute of Technology and a faculty member in the Department of Biology and the David H. Koch Institute for Integrative Cancer Research. He received the Nobel Prize in Physiology or Medicine in 1993 for his landmark work on the molecular biology of gene expression relevant to cancer and the mechanisms of RNA splicing. Dr. Sharp is co-founder of two biotechnology companies, Biogen (in 1978—now Biogen Idec) and Alnylam Pharmaceuticals (in 2002) and serves as director in both companies. He is elected member of the National Academy of Sciences, the Institute of Medicine, and the American Academy of Arts and Sciences.

Early stage company development

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Private financing

Private investors have always played an important role in moving innovations from the laboratory to the global marketplace. In a super cluster, a vibrant community of investors brings not just capital, but experience, knowledge, perspective, and connections to the table. Where is private capital invested? More than two-thirds of all private capital invested in life sciences invested in Massachusetts’ life industries in 2007, or $925 million, was invested in the biotechnology industry, and nearly all of the remainder, or $347 million, was spent on companies developing and manufacturing medical devices and equipment. Only $6 million, representing a sliver of investment dollars, was spent on healthcare services.

Figure 12 shows investment in Massachusetts-based healthrelated firms has risen 66 percent from 2002 to 2007.

Figure 12. Massachusetts health industries investment by sector, 2002-2007
2007 2006 2005 2004 2003 2002
$ millions

$1,278 $1,151 $809 $1,139 $1,042 $768

Figure 11. Percent of $1.3 billion invested in Massachusetts health industries, by sector 2007
Medical devices and equipment Healthcare services Biotechnology


Healthcare services

Medical devices and equipment

Source: PricewaterhouseCoopers/National Venture Capital Association, MoneyTreeTM report, Data: Thomson Financial, 2007


Table 9. Rank of Massachusetts venture capitalists on the following measures (strongest to weakest)
1. Life sciences expertise



2. Connections 3. Business expertise 4. Willingness to collaborate 5. Approachability 6. Willingness to fund radically new ideas
Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey

Source: PricewaterhouseCoopers/National Venture Capital Association, MoneyTreeTM report, Data: Thomson Financial, 2007

Super Cluster II Ideas, perspectives, and trends shaping the global impact of the Massachusetts life sciences industry

A closer analysis of biotechnology venture capital funding Venture capital firms invested money in Massachusetts biotechnology companies at all stages of development, from tiny startups to expanding enterprises, as shown in Table 10. Over the past two years, 24 venture firms have funded 17 biotechnology startup companies in Massachusetts.6 The majority of venture capital firms contributed funding to a single startup endeavor. HealthCare Ventures LLC and Polaris Venture Partners were most active in startup biotechnology in Massachusetts, funding six and three startups respectively. At the early-stage level, 41 companies received funding from 56 venture capital firms over the two-year period. The vast majority of venture capital firms committed to one company. Exceptions to this were Atlas Venture, Polaris Venture Partners and Flagship Ventures funding ten, nine, and eight investments, respectively.

Eighty-seven venture capital firms invested in 47 expansionstage biotechnology companies during this period. Most firms funded a single company. Firms that made multiple investments included Flagship Ventures, Oxford Bioscience Partners, HealthCare Ventures, and Polaris Venture Partners. In the later-stage arena, 28 biotechnology companies at this level received funding from 85 venture firms. Again, the vast majority of venture capital firms invested in one private equity deal. Exceptions to this were MPM Capital and Polaris Venture Partners, each funding six projects. Also, Oxford Bioscience Partners and Venrock Associates both participated in five funding deals during the two-year period.

Table 10. Analysis of venture capital funding for biotechnology companies at different stages of development, 2006-2007
Industry Number of participating financing firms* Companies funded Number of firms funding one company Number of firms funding two companies Number of firms funding three or more companies Most active venture capital firms at this level Startups 24 17 15 7 2 Healthcare Venture, Polaris Venture Partners Early stage companies 56 41 35 9 12 Atlas Venture, Polaris Venture Partners, Flagship Ventures Expansion stage companies 87 47 61 14 12 Flagship Ventures, Oxford Bioscience Partners, HealthCare Ventures, Polaris Venture Partners Later stage companies 85 28 60 14 11 MPM Capital, Polaris Capital Partners, Oxford Bioscience Partners, Venrock Associates

* Does not include undisclosed venture capital firms. Source: PricewaterhouseCoopers/National Venture Capital Association, MoneyTreeTM report, Data: Thomson Financial, 2007


Undisclosed venture firms are not counted in the total.

Early Stage company development stage Company Development

• 29

A closer analysis of medical device venture capital funding Two hundred venture capital financing offerings were issued to companies at various stages of development over the last two years in Massachusetts: 96 in 2006 and 104 in 2007. In 2006 and 2007, Polaris Venture Partners was the most prolific venture capital firm with eight offerings. BioVentures Investors, Oxford Bioscience Partners, Prism Venture Partners, Sanderling Ventures, and Triathlon Medical Ventures LLC each invested in five companies. Domain Associates LLC and Morgenthaler Ventures both had four investments. Table 11. Analysis of venture capital funding for medical device companies at different stages of development
2006-2007 Number of participating financing firms* Companies funded Number of firms funding one company Number of firms funding two companies Number of firms funding three or more companies Most active venture capital firms at this level Startups 9 9 9 0 0 n/a

For early stage medical device companies, Venture Capital Fund, Polaris Venture Partners and BioVentures Investors each made three investments over the last two years. At the expansion stage, Vertical Group was the biggest benefactor in 2006 and 2007, with three investments. J.P. Morgan Partners and Integra Ventures each invested in two companies at this level. For later-stage medical device manufacturers, Prism Venture Partners and Triathlon Medical Ventures LLC issued a combined total of five venture capital funding rounds. Domain Associates LLC, Morgenthaler Ventures, and Oxford Bioscience Partners each had four venture capital investments, as illustrated by Table 11.
Early stage companies 23 35 14 6 3 Venture Capital Fund of New England, Polaris Capital Partners, BioVentures Investors Expansion stage companies 31 37 25 5 1 The Vertical Group, Integra Ventures, JP Morgan Partners, New England Partners, Sanderling Ventures Later stage companies 69 119 39 17 13 Prism Venture Partners, Triathlon Medical Ventures LLC, Domain Associates LLC, Morgenthaler Ventures, Oxford Bioscience Partners

* Does not include undisclosed venture capital firms. Source: PricewaterhouseCoopers/National Venture Capital Association, MoneyTreeTM report, Data: Thomson Financial, 2007

What were the biggest deals? The top 10 private equity deals in Massachusetts in 2007 accounted for more than a third of a billion dollars, and overwhelmingly favored biotechnology firms. As shown in Table 12, Targanta Therapeutics Inc., a Cambridge-based company that develops antibiotics to treat serious infections Table 12. Top 10 private equity deals in Massachusetts
Rank & company 1. Targanta Therapeutics, Inc.
(formerly PhageTech, Inc.)

that can strike patients in hospitals and other medical institutions, received $70 million. Ironwood Pharmaceuticals, a Cambridge-based company working on treatments for cardiovascular and gastrointestinal issues, received $44 million.

Location Cambridge Cambridge Cambridge Boston Cambridge Cambridge Cambridge Marlborough Cambridge Cambridge

Sector Biotechnology Biotechnology Biotechnology Medical Devices and Equipment Biotechnology Biotechnology Biotechnology Biotechnology Biotechnology Biotechnology

Description Manufactures biological products to treat infections in hospitals and medical facilities. Operates as an entrepreneurial pharmaceutical company. Develops molecule drugs. Develops therapeutic products for the treatment of front eye diseases. Develops drug therapies for diseases of protein misfolding and amyloidosis. Develops cancer therapeutics. Develops drugs to treat musculoskeletal and metabolic disorders. Provides contract services for bioprocess development and manufacturing. Develops nucleic acid-based products and services in the United States. Develops and markets therapies to treat metabolic disease.

Investment $69,999,800 $44,000,000 $35,935,000 $34,000,000 $32,251,200 $31,913,000 $30,999,800 $30,839,100 $29,844,000 $28,030,200

2. Ironwood Pharmaceuticals
(formerly Microbia, Inc.)

3. Sirtris Pharmaceuticals, Inc. 4. Aciex, Inc. 5. FoldRx Pharmaceuticals, Inc. 6. AVEO Pharmaceuticals, Inc.
(formerly GenPath Pharmaceuticals)

7. Acceleron Pharma, Inc. 8. Xcellerex, Inc. 9. Archemix Corporation 10. Elixir Pharmaceuticals, Inc.

Source: PricewaterhouseCoopers/National Venture Capital Association, MoneyTreeTM report, Data: Thomson Financial, 2007

Super Cluster II Ideas, perspectives, and trends shaping the global impact of the Massachusetts life sciences industry

Merger and acquisition environment Through mergers and acquisitions, companies from around the world claim a stake in Massachusetts’ life sciences technologies and talents, while local companies continue to expand their reach around the globe. Table 13 shows the 10 largest acquisitions and mergers involving Massachusettsbased life sciences companies over the past 12 months. Japan’s largest pharmaceutical company, Osaka-based Takeda Pharmaceutical, recently acquired Millennium Pharmaceuticals of Cambridge for $8.8 billion. A Swedish firm, Getinge Group AB, purchased Boston Scientific’s cardiac and vascular surgery medical equipment businesses for $750 million. These deals represent two of the five largest transactions involving Massachusetts-based life sciences companies over the previous 12 months. Many of the top-10 deals didn’t require a passport. Hologic, a Bedford-based company that specializes in diagnostic imaging equipment, merged with Cytyc of Marlborough for $6.2 billion and also purchased BioLucent of Aliso Viejo, Calif., for $70 million. In the health care sector, pharmacy benefits giant Medco Health Solutions of Franklin Lakes, N.J., expanded its market share by acquiring Wakefield’s PolyMedica Corp. for $1.5 billion.

Looking solely at the medical device industry, Massachusettsbased companies played a role in three of the 10 largest mergers and acquisitions in the United States last year, as seen in Table 14. The merger of Hologic and Cytyc, mentioned above, was the second-largest such deal in the nation. Philips Medical Systems purchased Murrysville, Penn.based Respironics, Inc., a company best known for making devices to help patients suffering from sleep apnea and other breathing disorders. Royal Philips Electronics NV, based in Andover, is a US subsidiary of Netherlands-based Kininklijke Philips Electronics NV. Inverness Medical, a Waltham-based company that makes medical and diagnostic products, purchased San Diego-based medical products business Biosite.

Table 14. Largest medical device mergers and acquisitions, 2007
Acquiring company Siemens AG Hologic Philips NV* Warburg Pincus Medtronic Onex Healthcare Holdings Teleflex ReAble (Blackstone) Medco Health Solutions Inverness Medical Innovations Qiagen NV Cardinal Health Acquired company Dade Behring Holdings Cytyc Respironics Bausch & Lomb Kyphon Eastman Kodak Health Arrow International DJ Orthopedics PolyMedica Biosite Digene Viasys Value (US $B) $7.0 $6.2 $5.1 $4.5 $3.9 $2.6 $2.0 $1.6 $1.5 $1.5 $1.4 $1.3

Table 13. Top 10 mergers and acquisitions involving Massachusetts life sciences companies in the last 12 months
Millennium Pharmaceuticals acquired by Takeda Pharmaceutical Hologic Inc. merged with Cytyc PolyMedica Corp. acquired by Medco Health Solutions Biosite acquired by Inverness Medical Innovations Boston Scientific sold its Cardiac Surgery and Vascular Surgery business to Getinge Group Sirtris Pharmaceuticals acquired by GlaxoSmithKline Boston Scientific sold its Fluid Management and Venous Access businesses to Avista Capital Partners Bioenvision, Inc. acquired by Genzyme Corp. ViaCell acquired by PerkinElmer BioLucent, Inc. acquired by Hologic Haemoscope Corp.'s TEG Homeostasis Analyzer business acquired by Haemonetics Corp.
Sources: BiopharmInsight, May 6, 2008; MassMedic

$8.8 billion $6.2 billion $1.5 billion $1.5 billion $750 million $720 million $425 million $345 million $300 million $70 million $44 million

* While Philips is headquartered in The Netherlands, the Healthcare division is located in Andover, Mass. Massachusetts-based companies are in bold. Source: MassMedic

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And we need a steady flow of new venture funds to form a sort of farm club for the great funds of the future. More life sciences venture capital means more life sciences companies. bigger financings and more growth for life sciences. especially in biotechnology. there can be little doubt that more local venture capital would lead to more startups. Given the enormous capital needs. Massachusetts’ position in biotechnology is more competitive with our region running neck and neck with Silicon Valley and San Diego—together. Massachusetts has long been the home of the second largest concentration of overall venture capital dollars in the United States—one-third the size of Silicon Valley’s at the end of last year. The largest local pools of potential limited partner capital to support venture funds are the state pension fund ($50 billion in assets) and the endowments of Harvard ($35 billion) and MIT ($10 billion). life sciences. 32 • . And Silicon Valley’s high technology history strongly suggests that no matter how much venture capital accumulates. the venture capital or the entrepreneurs? In reality.Perspective Capital formation By Chris Gabrieli Chris Gabrieli Bessemer Venture Partners There is a tight correlation between access to venture capital and ability to participate in life sciences entrepreneurship. but the region would be the better for it. But none act significantly as a conscious catalyst for local venture fund formation and success. more jobs. once a cluster of critical mass has been achieved. diversified investing for the good of the funds and therefore each has some money invested in Massachusetts life sciences focused venture funds. But larger funds and everyone in the life sciences cluster live in an ecosystem where someone has to be willing to invest small amounts—sometimes as little as under $1 million—to help launch raw startups than can mature to the promising ventures that can later command rounds of venture financing in the tens of millions of dollars. Massachusetts has a good competitive position on this key supply-side asset for life sciences but could be doing much more to build up its position.and earlier-stage ventures. Massachusetts needs to develop effective win-win ways to align more of this $100 billion in assets (and billions more when other public pension funds and university endowments are included) to the long-term success of the Commonwealth’s most promising innovation-based industry. One can debate which comes first: the chicken or the egg. and new funds with no track record. But venture capital returns are very attractive and fiduciary regulations allow trustees to consider second bottom-line goals as long as investment returns are expected to be similar. and the long time spans before product-based revenues. And it takes no taxes to do it—just a fuller appreciation of benign self-interest and some strong leadership. there seems to be a concomitant growth in entrepreneurs and ideas to absorb it. Yet this has not been a public or private policy goal. high-quality venture capital firms active in life sciences would lead to more deals here. Expanding the number and scale of Massachusettsbased. Chris Gabrieli is a partner at Bessemer Venture Partners. the companies in this sector depend on institutional venture capital funds to provide the means to pursue their ambitious plans. More young partners of big firms would leave to hang out their own shingle if they knew they could gain backing. Can there be any doubt that successful Massachusetts life sciences companies and their concomitant job growth and tax contributions would benefit all Massachusetts-based institutions more than similar success of California or Mumbai companies? The need is most pressing in two areas: small funds focusing on seed. Some life sciences venture capitalists might be wary of the competition. Major institutional investors prefer the simplicity of writing fewer big checks and making them out to funds with decades of experience. these three clusters commanded two-thirds of all biotech venture capital in the Fourth Quarter of 2007. as clearly we have done in life sciences in Massachusetts. and more opportunities for success. Such strategies cannot be a tax on or a drag on these funds’ returns—this would violate their fiduciary duty. but still ahead of other regional clusters. Each of these players actively participate in the venture capital asset class in pursuit of strong. It’s a simple formula that could help drive the growth and competitive strength of our super cluster.

drawing on our network in the local biotech community. Dr. Their research. After demonstrating proof of concept for the efficacy of targeted nanoparticles in animal cancer models. I believe BIND Biosciences is an example of the possibilities. supported through the Prostate Cancer Foundation and the NCI funded MIT—Harvard Center for Cancer Nanotechnology Excellence. BIND is now poised to enter the clinic with it first product in 2009 targeting oncology indications and is developing a rich pipeline including a product to treat cardiovascular disease. together with the Polaris partner and a former Langer lab graduate. and the technology. the team. Omid Farokhzad of Harvard Medical School. McGuire introduced me to Farokhzad and Langer. As we formed our scientific advisory board we drew upon the expertise of leaders in the field such as Dr. Zale joined as vice president of development and. and Momenta. In need of an experienced CEO. In 2007 we in-licensed a large intellectual property estate from MIT and Harvard and raised $18. Steve Zale to assess the potential for their academic work to be translated into commercially successful products. Farokhzad and Langer reached out to Dr. I immediately saw the power of BIND’s technology and possibilities for its application. we assembled an experienced team with successful track records in drug development from companies such as Alkermes. Robert Langer of MIT and Dr. Having secured the funding. and Langer. BIND’s foundational technology was developed at MIT and Harvard through the pioneering research of Dr. Massachusetts provides a synergistic and supportive environment uniquely suited for efficiently translating scientific innovation into important medical advances for patients in the millennium ahead. all of whom are in close proximity to BIND’s facility. focuses on engineering-targeted nanoparticle technologies to treat cancers and other diseases. Millennium. Farokhzad.5 million from Polaris. ARCH Ventures. and venture communities to rapidly establish a leadership position in developing targeted nanoparticle therapeutics that will provide more effective yet safer treatment for serious disease. Glenn Batchelder is president and chief executive officer of BIND Biosciences. Infinity.Perspective A model for utilizing Massachusetts’ resources to create the next generation of life sciences companies By Glenn Batchelder Glenn Batchelder BIND Biosciences The unique fabric of Massachusetts’ life sciences community has the opportunity to serve as a model to address some of the significant challenges facing the pharmaceutical industry. a managing partner of Polaris Ventures who had co-founded 13 other companies with Langer. Early stage company development • 33 . Peter Libby of Brigham and Women’s. and Dr. Ulrich von Andrian of Harvard Medical School. the scientific founders reached out to Terry McGuire. Zale helped build an extremely successful polymeric microparticle-based drug delivery platform and the commercialization of products such as Risperdal Consta and Vivitrol. McGuire. industry. developed a business plan. Today we are 22 employees strong and will expand our team to 35 by the end of 2008. Dr. Phil Kantoff of Dana Farber. and Nanodimension. Flagship Ventures. such as rising costs and longer development times for new drugs. Amir Nashat. the advisors. We were awarded a highly competitive $2 million NIST ATP grant to further develop our technology platform. Dennis Ausiello of MGH. This proximity of world-class talent and institutions and the associated network of relationships enabled the rapid creation of BIND and a potential new class of important therapeutics. With a positive nod from Zale. emerging from the rich local academic. During his twelve years at Alkermes.

One significant difference between the medical device industries on the two coasts is that California historically has attracted more classic entrepreneurs: researchers. Massachusetts has always been on the cutting edge. The life sciences industry represents the future of the Commonwealth’s economy. Randle Stuart A. Randle is president and chief executive officer of GI Dynamics. Massachusetts can help its medical devices companies make the most of these opportunities by taking steps to accelerate entrepreneurialism and building a virtual center of excellence. making this leap has been harder here in Massachusetts than it has been in Silicon Valley. conducting workshops for inventors. this can be limiting: It is more difficult for companies to succeed if their intellectual drivers are not actively involved in getting the business started and organized. The Massachusetts Medical Device Industry Council has been promoting entrepreneurialism. and help build the companies that will provide tomorrow’s jobs and economic growth. We should act now to support it. benefiting from being part of the super cluster. With rapid advances in biotechnology. scientists. While Massachusetts has numerous researchers who are the equal or superior of their West Coast counterparts. physicians. the medical devices sector has enormous opportunities. In the end. and engineers who have been intent on starting companies and translating concepts into products. and researchers on how to take great research ideas and develop them to the point at which they are viable. faces a challenge: How to make the jump from the ideas generated by basic research to concepts that are supportable by venture capitalists. many of them are focused more on pure academic work and less on building companies. In fact. and an evolution in how products are delivered. 34 • . and molecular and cellular biology. On the whole. Stuart A.Perspective Fostering medical device entrepreneurship By Stuart A. and its replication elsewhere. Several leading players are showing how to do this. can help nurture tomorrow’s leaders. and his proposals have provided necessary oxygen for entrepreneurial companies. Stanford cardiologist Thomas Fogarty. small businesses. Support for this program. this program is attracting brilliant researchers with an entrepreneurial bent who otherwise might be lured to the West Coast. The state can do its part by building on the momentum of Governor Patrick’s life sciences initiative. engineering. The Governor understands the medical devices sector and knows its importance. Randle GI Dynamics The Massachusetts medical device industry. exemplifies this type of entrepreneur. MIT’s Center for Biomedical Engineering illustrates how academic research can be combined with economic development. supported strongly by industry. who has helped launch a score of businesses. would be a strong statement. The council.

Boston Scientific. And the Commonwealth has also been at the center of commercializing these inventions with the steady creation of revolutionary companies like Alnylam. and where an Innovators Marketplace allows anyone to walk into a room and gain access to all the tools and connections needed to launch a company: grant writers. Daniel O’Connell. MALSI’s Eight Initiatives Create the MA Life Sciences Innovation Day Organize a state-funded seed program in life sciences Create a state-funded entrepreneur-in-residence program Create education programs to train 50 leaders and 1. or partnerships. or Boston Scientific every year. and sources of funding. Cubist. Although research in Massachusetts is backed by over $2 billion in funding from the National Institutes of Health. Table 15. inform. Such a concentration of ideas. legal advice. Laboratories in Massachusetts discovered the phenomenon of angiogenesis and RNA silencing. yet the willingness and passion to help is widespread. reimbursement experts. Genzyme.000 entrepreneurs Hold an annual statewide life sciences competition Improve the funding environment through alternative sources (foundations and angels) Create the MA startup portal to manage the lifecycle of a start-up Start a campaign to excite college-30 year olds about life sciences Source: Massachusetts Life Sciences Startup Initiative Early stage company development • 35 . and inspire entrepreneurs and innovators. MALSI’s partners are now in the process of prioritizing and executing these initiatives. The group came up with 31 ideas to promote life sciences in the state. In the first quarter of 2008. Hologic. we will fulfill our mission. MALSI has received strong support from the Massachusetts Life Sciences Center and the Massachusetts Housing and Economic Development Secretary. and grow a life sciences company. 1 place in the world to start. as listed in Table 15. nurture. life sciences has created fewer jobs in Massachusetts than we would have hoped. licenses. 40 leaders met in Waltham to brainstorm about maintaining the state’s leadership and to ensure that every entrepreneur could easily identify the resources needed to start a venture. As a state of six million people. Inverness. Abigail Barrow is a founding chair of MALSI and director of the Massachusetts Technology Transfer Center. and money is unparalleled in the world. serial entrepreneurs. Innovation in the Massachusetts life sciences sector goes back more than 150 years. MALSI was set up to proactively confront the growing sentiment that the Commonwealth is surrendering its lead. 1846. On October 16. One of the eight initiatives is the Massachusetts Life Sciences Innovation Day. MALSI wants to ensure that the Commonwealth has the resources and processes in place to make it significantly easier for the very best ideas to move rapidly to funded companies. The Massachusetts Life Sciences Startup Initiative (MALSI) has a simple mission: ensure that Massachusetts remains the No. A series of panels and lectures discuss how some of our companies were started. Biogen. anesthesia was first given to a patient at Massachusetts General Hospital.Perspective A statewide effort to accelerate the pace of creating life sciences companies in Massachusetts By Anupendra Sharma and Abigail Barrow Anupendra Sharma Massachusetts Life Sciences Startup Initiative Abigail Barrow Massachusetts Life Sciences Startup Initiative If one stands on Massachusetts Avenue Bridge and walks one mile in either direction. Smart infusion pumps invented here have saved thousands of lives. Anupendra Sharmais a founding chair of MALSI and an investment partner at Siemens Venture Capital. advice. This is a day to educate. entrepreneurs. It is a day where research in the state is showcased. At MALSI’s seminal meeting of stakeholders. Haemonetics. and Sirtris. which were condensed into eight initiatives. revolutionizing surgery. If MALSI can help turn a promising discovery into one Biogen. one has everything one would need to start a billion-dollar company. Confluent. design and engineering companies. our resources are limited. Momenta. Massachusetts remains third in the United States in volume of venture investments in life sciences.

Here they find ample available space. opened in the fall of 2007 and is now fully occupied with a mix of academic labs and emerging life sciences companies. With the build-out of WPI’s Gateway Park and with the University of Massachusetts Medical School as the flagship for the Commonwealth’s $1 billion Life Sciences Initiative. for example. Other states competed for the Creganna manufacturing operation. close to Cambridge yet with lower operating costs and high quality-of-life elements that are important for their work force. Those factors. and Tufts University’s Cummings School have made the greater Worcester area an anchor of the Massachusetts super cluster. The first building at Gateway Park. and support space. We have the Massachusetts Biomedical Initiatives. which moved into Gateway Park in December of 2007. officially opened its US manufacturing facility in Marlborough. coupled with the growing academic and clinical resources at University of Massachusetts Medical School. The activity at Gateway Park reflects the growth trajectory for companies in this key industry. in March 2008 the Irish company Creganna. It is also growing from without. a nonprofit incubator that helps translate innovative technologies into start-up companies. 36 • . the greater Worcester region will continue to offer opportunities for companies across the continuum of the life sciences.Perspective Gateway to growth and the global market By D’Anne Hurd D’Anne Hurd Worcester Polytechnic Institute The Massachusetts life sciences industry is growing from within. Those same logistics make this area ideal for European companies looking to establish US operations. giving early stage companies room to grow and providing larger blocks of space for mature companies ready to expand. The life sciences companies in the greater Worcester area are also well positioned to reach into the European market because of easy air travel between the two regions and a time difference that allows for overlapping hours during the work day. we are now building out a 12-acre mixed-use life sciences campus development with a total of 550. which develops components for minimally invasive medical devices. In either case. We host rapidly growing young companies. D’Anne Hurd is Worcester Polytechnic Institute’s general counsel and vice president of business development at Gateway Park.000 square feet of flexible lab. such as reasonable housing costs and strong public and private schools. Worcester Polytechnic Institute (WPI). WPI’s $50 million life sciences and Bioengineering Center. as startups proliferate and existing companies expand. These growth patterns will continue during 2008 and beyond because the Massachusetts life sciences super cluster remains one of the most dynamic in the world. office.000 square feet. At Gateway Park in Worcester. We have research labs where discoveries drive innovation. such as Blue Sky Biotech and RXi Pharmaceuticals (the company co-founded by Nobel laureate Craig Mello to develop drugs based on his breakthrough RNAi research). but central Massachusetts won because of our strategic location and the existing infrastructure of life sciences resources. many growing life sciences companies choose to locate in the western rim of the super cluster. The next phase of development at the park will be two new science buildings of approximately 120. as companies move here to leverage the synergies of the super cluster and the state’s strategic location for connecting the European and North American markets. For example.

Since 1985. including select agents. some renovating or constructing other specialized facilities on the campus to meet their specific R&D needs. as shown in Table 16 and Table 17. • 37 . Inc. This program is about to take a huge leap forward with the completed construction of the New England Regional Biosafety Laboratory in spring 2009.000 square feet of science-oriented real estate development on nearly 100 acres of Tufts’ campus. Cummings Veterinary School operates the Tufts Biotechnology Transfer Center on its Grafton/Westborough campus. and insectary for discovery and pre-clinical research in infectious diseases. Early Stage Company Development Recognizing the need expressed by incubator tenants and other life science companies for larger life science friendly real estate. The 41. including blood substitutes. The Cummings Veterinary School’s catalytic role is demonstrated on a larger scale in the collaborative research it conducts with other institutions and life science companies in the Massachusetts cluster. and other universities in Massachusetts. and that most human medical therapies require validation in one or more animal models prior to FDA approval. have led to human and veterinary medical breakthroughs. This regional resource will provide BSL-3 labs and ABSL3vivaria. This smart growth location is permitted for 702. Companies Incubated on Tufts Cummings School of Veterinary Medicine’s Campus Company Antigenics Biovalve Circe Biomedical Diacrin GTC Biotherapeutics Pulmonary Metrics Sequitur Stryker Biotech Verigen Vivo Rx Source: Tufts Veterinary School Field Antisense Medical devices Xenotransplantation Xenotransplantation Transgenics Imaging Biotechnology Orthopedic Immunotherapy Xenotransplantation Table 17. Inc.000-square-foot New England Regional Biosafety Laboratory is the anchor tenant and the balance of this master-planned science park is available for buildto-suit opportunities. Recognizing that over 70 percent of infectious diseases emerging in the last 20 years came from animals. * Transgenic Sciences. CF Technologies Source: Tufts Veterinary School Field Therapeutic Testing Transgenics Transgenics and Medical Testing Food & Water Biosafety IDEXX Veterinary Services-N. development capability. Midas Biologicals. use their expertise and research resources to help power the R&D success of the commercial life science sector. Companies founded with Cummings School Technology Company COLLEGIUM Pharmaceuticals. Cummings faculty’s own work has spawned six life science companies in Massachusetts. and financing are available. Thus far 19 companies have been tenants in Tufts incubator. State and municipal tax incentives. embedded among the research resources of the university. Through these collaborative research efforts.E. Cummings School. orthopedic fixation devices. a therapy against E coli toxicity. These catalytic and supportive contributions of Cummings School of Veterinary Medicine at Tufts University are one of many examples of Massachusetts colleges and universities powering the life science super cluster in the Commonwealth. the school has made its faculty expertise and unique research infrastructure available to other investigators and companies in the region through its collaborative and contract research program. the Cummings School has begun development of Grafton Science Park. New England’s only veterinary school pursued its unique niche in discovery and preclinical research.Perspective Incubating innovation at Tufts Veterinary School By Deborah Kochevar Deborah Kochevar Tufts Veterinary School The Cummings School of Veterinary Medicine at Tufts University is one example illustrating the catalytic role of universities in the regional super cluster. This business incubator hosts small startup companies and the preclinical operations of larger companies that want to be closer to their Tufts collaborators and the shared scientific and preclinical resources at the Cummings School. and the first approved human pharmaceutical produced in transgenic animals. and many Massachusetts universities provide more. Deborah Kochevar is dean of Tufts Veterinary School. The discovery research and preclinical contributions of Cummings School’s faculty. Lab* Diagnostic Testing SECUROS Veterinary Orthopedics* Surgical Devices * Also incubated on the Veterinary School campus. Sometimes companies need more from universities than research collaboration and a technology license. Inc. Table 16. aerobiology suite.

Employment .

Goodman University of Massachusetts The Commonwealth of Massachusetts is widely recognized as a science and technology powerhouse and as home to the world’s leading universities. information technology. our work has documented the extraordinary strength of the Commonwealth’s life sciences work force. our public and private sector leaders are committed to ensuring that Massachusetts will continue to provide life sciences employers with the brainpower they need to thrive for years to come. life sciences employers require professional staff with education and expertise in computer science. This will allow students to apply the lessons they learn in some of the best classrooms on earth to the real world scientific and technological problems being addressed by life science employers in Massachusetts. and ensuring they possess the knowledge and scientific habits required to fully reap the benefits of these opportunities and meet the needs of our growing employers. Public and private sector leaders recognize the critical importance that a well educated work force plays in preserving and enhancing the competitiveness of the numerous biopharmaceutical and medical device firms that call the Commonwealth home. That is why in 2007. In addition to world-class medical and biological scientists. To date. sales. Highly skilled Massachusetts workers have produced a steady stream of scientific breakthroughs and transformed these cutting edge ideas into life-saving commercial products which truly have made our state a global leader in life sciences. Goodman Michael D. • Recognize the industry’s need for talent in a broad array of fields. marketing. higher education leaders. To maintain our competitive advantage in the life sciences. legal and regulatory affairs. is the director of Economic and Public Policy Research at the University of Massachusetts Donahue Institute and managing editor of MassBenchmarks. The Commonwealth’s highly innovative life science companies are poised to take full advantage of all that the Bay State has to offer. • Expose our students to the world of work in the life sciences by expanding internship and cooperative education programs. Employment • 39 . Through efforts such as the Life Sciences Talent Initiative. the fuel that powers the Massachusetts innovation economy is the Commonwealth’s world-class work force. teaching hospitals. Michael D. and state policymakers. the Massachusetts Life Sciences Center and the Massachusetts Biotechnology Council engaged the University of Massachusetts Donahue Institute to identify emerging work force needs in the state’s life sciences super cluster. Goodman. PhD. This ongoing effort has yielded important lessons gleaned through intensive research and extensive outreach to industry CEOs.Introduction and industry overview By Michael D. management. engineering. the quarterly journal of the Massachusetts economy. While these extraordinary institutions have helped make Massachusetts a global innovation powerhouse. and has identified challenges that state officials and industry stakeholders have already begun to address. we must: • Expand the pipeline of future workers by doing a better job of inspiring our children to pursue careers in life sciences. accounting. and support the development of a comprehensive strategy to ensure life sciences employers have the talent they need to succeed and grow in Massachusetts. human resource professionals. and manufacturing. and research institutions.

739.149 17. or 27 percent of the industry total. ’ The health care industry has added jobs in Massachusetts at a faster clip than the life sciences industry over the past five years.310 workers.200 2006 267.427 71. and PricewaterhouseCoopers analysis. The state labor force declined by 81. or 30 percent of the total.909 23.010 4.247 Distribution 9% 27% 30% 15% 7% 12% 100% Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages. and PricewaterhouseCoopers analysis.549 143.53% – 3.116 72.1% 20.626 77. and PricewaterhouseCoopers analysis.229 71.672 5.247 Change – 72.068 9. Health care employers gained 40.467 workers.455 10.389 136.863 9.247 109.523 121.522 113. as illustrated by Table 21.673 17. and PricewaterhouseCoopers analysis.725 Change – 2. and wholesale trade added employees at a faster rate than the industry as a whole.264 8.409 11.257 5.82% 8. and trends shaping the global impact of the Massachusetts life sciences industry .257 5.4 percent. Distribution of employment in the Massachusetts life sciences industry Sector Pharmaceuticals Biotechnology Medical Device and Equipment Wholesale Trade Medical and Testing Laboratories Teaching Hospitals Total 2006 6.08% Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages. Massachusetts life sciences industry employment compared to other select Massachusetts sectors. The medical device and equipment field represents the largest employer in the industry with 23. but its 61.247 Change 2001 to 2006 – 3% 28% – 8% 12% 19% 16% 8% Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages. Medical and testing laboratories.467 11.9 percent over this period.877 2005 6.169 16.0% – 3.346 25. or 2. as the manufacturing sector lost nearly one-fourth of its work force.391 71. Note: NAICS 622000 is allocated to the Healthcare Industry and partially to the Life Sciences Industry Table 21.909 23. Table 18.570 77.532 11.9% 8. Super Cluster II Ideas. matching the growth rate for California.506 4.078 2006 6.01% – 89. 2001 and 2006 Industry All Industries Manufacturing Wholesale Trade Healthcare Industry Life Sciences Industry 2001 2. Table 19. as shown in Table 19.496 50.086-employee work force is four-fifths the size of Massachusetts. 2001-2006 Sector Pharmaceuticals Biotechnology Medical Device and Equipment Wholesale Trade Medical and Testing Laboratories Teaching Hospitals Total 2001 7.0% 8.921 2004 6. while the pharmaceutical sector lost 3 percent of its work force during this period. Table 20.334 40.353 10.570 77. North Carolina’s life sciences industry grew 20.536 1.064 77. Biotechnology is the fastest growing segment of the life sciences industry. as Table 20 demonstrates.364 4.317 10.086 371.971 9.886 1.686 73.274 4. this sector lost 8 percent of its work force between 2001 and 2006.976 20.976 20.539 8.813 61.355 – 4. Life sciences industry employment in Massachusetts by core sector.813 2003 8.789.708 22.820 8. a 10.208 18.07% 10.469 299. over the five-year period.892 8.824 389.4% 1. perspectives.070 23.086 1.199 jobs.922 19.068 9. growing by 28 percent over five years.232 141. While medical device and manufacturing remains one of the largest employers in the industry. Figure 18 illustrates the distribution of employment in 2006.725 – 3. Life sciences industry employment by select states 2001 and 2006 2001 California Massachusetts New Jersey New York North Carolina United States 247.883.092 Change % change 19.408 120. between 2001 and 2006. but falling slightly behind the industry as a whole.199 5.861. compared to the life sciences industry’s 8 percent gain.467 11.3% Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages.247 people in 2006.843 – 23.794 22.308 74.522 2006 2. Massachusetts’ life sciences work force grew by 8 percent from 2001 to 2006.522 2002 7.966 73.288 25.The life sciences work force How many people work in the life sciences industry? The life sciences industry in Massachusetts employed 77.059 4. Biotechnology employers account for 20. teaching hospitals.752 411.159 11.909 workers.8 percent increase.

625 $80.Figure 14.450 $99.032. as illustrated in Figure 17. Table 22.450. and PricewaterhouseCoopers analysis. $99. Average life sciences wages by sector.435 $99. are you more likely to work for a large company.625. 27% 8% 25% Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Employment • 41 .821 $53. or in academia? Startup Large company Academia 8% Every sector in the life sciences industry boasts a higher annual average wage than the state average.685 $74.267 $59.1 percent increase over the state average. Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages.7 percent increase over the state average.432. Figure 16. represents a 89. represents a 65. 2006 Estimated average wages by sector 69% Pharmaceuticals Biotechnology Medical Device and Equipment Wholesale Trade $76. The average annual salary for workers in Massachusetts is $52.435. Respondents are confident that Massachusetts offers sufficient opportunities for employment and job growth. Table 22 shows that wages for life sciences workers outshine those in the health care field. In your next position. and PricewaterhouseCoopers analysis. The pharmaceutical sector average.866 $53. a startup. is a 1. $53. would lead them to pursue employment outside Massachusetts.207 $48. $80.032 Massachusetts state average annual salary $52. as seen in Figure 15.4 percent increase over the overall weighted health care industry wage of $48. Healthcare industry wages Industry name Health Insurance Carriers Ambulatory healthcare services Hospitals Nursing Homes and Residential Care Facilities Overall weighted average healthcare industry wage Overall weighted average life sciences industry wage Wage $53. not pay. What is the most important factor that would cause you to pursue or accept a job outside of the Massachusetts super cluster? Lifestyle Pay Commute time Other 40% Source: Bureau of Labor Statistics Quarterly Census of Employment and Wages. as Figure 16 demonstrates. Teaching hospitals’ average. The overall life sciences industry wage. 23% Figure 15.362 $30.432 Survey respondents said lifestyle issues.116 $54.137 Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Medical and Testing Laboratories Teaching Hospitals What do life sciences workers in Massachusetts earn? Although the health care industry employs more than five times the people than the life sciences industry in Massachusetts.

81 0. Neighboring Middlesex County accounts for an additional 15 percent of Massachusetts’ life sciences work force. you could find an opportunity in Massachusetts of equivalent or higher level? 2% Confident Somewhat confident Not confident Figure 18. and trends shaping the global impact of the Massachusetts life sciences industry . Survey of Earned Doctorates.000 people. Work force distribution and impact While the Boston area is home to the highest concentration of life sciences workers. these employees are making an impact across the Commonwealth. followed by Massachusetts’ North Shore.64 0.55 2.85 0. and organizations in the region along Interstate 495 employ another 8 percent of these workers. this average is $154. biomedical sciences 6. and the total economic impact is $8.918 for each fulltime position. Outside the greater Boston area. The Massachusetts Biomedical Initiatives organization estimates that each employer in the Boston-Cambridge area spends an average of $139.000 annually on wages and benefits for each fulltime position.86 0.15 3.05 0.67 3. Approximately one-third of all life sciences workers are based in the Boston metropolitan area.49 2. Massachusetts life sciences employees by region Region Route 90 corridor North Shore Boston Greater Boston Worcester Middlesex County 5% 8% 16% 16% 16% 15% 24% 28% 70% Other Source: Massachusetts Biomedical Initiatives. How confident are you that if you lost your job today. as depicted in Table 23.20 Health sciences 1. which calculates to a total economic impact of $2. 2006 State Massachusetts Maryland New York North Carolina Pennsylvania California Biological. 2008 Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Education A highly educated work force contributes to the success of the life sciences cluster in Massachusetts.38 Chemistry 2.47 1.8 billion. Table 23. perspectives.46 0.86 3.3 billion. Worcester boasts the biggest life sciences work force. 2006 Super Cluster II Ideas. Life sciences PhDs granted per 100.92 Source: NORC at the University of Chicago. and differentiates the Commonwealth from other states pursuing life sciences employers and economic opportunities. Looking at the entire region encompassing Boston and Worcester.94 0. as shown in Figure 18.Figure 17.13 0.04 2.

we are creating the largest permanent exhibit and program initiative ever developed by the museum: the Hall of Human Life project. Another corporate partner. When completed. it supports interactive exhibits. Also the largest single corporate gift in the museum’s history. our goal is to motivate the next generation of life science innovators—both scientists and engineers— while introducing adults to the wonders of the living world and fostering the decision-making skills needed to become informed citizens. the museum honors its past as a natural history museum. and K-12 science and technology curricula. By expanding our engagement with life science and technology. community forums. programs for students and teachers.Perspective Inspiring the next generation of life sciences innovators By Ioannis Miaoulis Ioannis Miaoulis Museum of Science For decades. In response to the dramatic growth in the bioscience world. As the museum evolves from New England’s most visited cultural attraction into a national leader in science and technology education. sparking those moments of discovery at the heart of science through hands-on learning and lively encounters with museum educators. In 2006. Our visitors can engage in hundreds of life science explorations. No topic touches people as deeply as this one. the largest in its 25-year history. while connecting to the future through the latest scientific discoveries and technological innovation. this effort will offer a comprehensive picture of what it means to be human. Employment • 43 . the museum is grateful to the Massachusettsbased corporate partners that lend their educational and financial support to our efforts. the museum is expanding its historic focus in life science and the technology behind it. We are creating new permanent exhibits and programs as well as strengthening the presence of life sciences in temporary exhibitions. Today. Our role in teacher support continues to grow as we begin our fourth year as a Regional Training Center for the MassBioEd BioTeach program. learning about anatomy by touching a sheep’s lungs. life science research is changing our lives. Ioannis Miaoulis is president and director of the Museum of Science. or using the tools of geneticists to analyze DNA fragments. we look forward to partnering with the Commonwealth’s life science leaders. Recently. teacher professional development. including investigating primate evolution by observing live tamarin monkeys. to create the Genzyme Biotechnology Education Initiative. and other formats. including the dramatic impact of biological and medical technologies on our lives. the Genzyme Corporation made a $2 million gift. To bring this knowledge and technology to our audience. we collaborated with Genzyme scientists in a first-of-its-kind professional development seminar that introduced Massachusetts middle school teachers to bioengineering through the seemingly simple task of baking bread. Our life science initiative also reflects the museum’s championship of technological literacy across the country as it incorporates cutting-edge technology and engineering into interactive exhibits and programs at the museum and in classrooms nationwide through our National Center for Technological Literacy®. Our mission—to stimulate interest in and further understanding of science and technology and their importance for individuals and society—has never been more important. Museum staff assisted in the development of this program’s innovative curriculum and associated materials kits. As we create the science and technology center of the 21st century. the Novartis Institutes for BioMedical Research. Located in a hub of life science research and medical innovation. is the lead sponsor for our annual Biotechnology Symposium for Educators and has helped create an international exchange program between Massachusetts and European science teachers. With the profound implications of the biotechnology revolution on our lives. inspirational and enlightening life science-related experiences in our exhibit halls are more important than ever. supporting an initiative that outfits high school biology labs with state-of-the-art biotechnology equipment. the Museum of Science in Boston has inspired young people.

We need immigration reforms that can place these extraordinarily educated foreign students on a fast track to permanent residency and citizenship. who are increasingly likely to return to their home country as economic opportunities increase there. These vacancy rates signal considerable losses in potential output. Job vacancy rates for workers in these fields ranged in the 8 percent to 10 percent range at the end of 2007. of course. skills. the rising share of SEIT degrees granted to students with temporary visa status places the domestic skill development pipeline in long-term jeopardy. Between 1996 and 2006 the nation increased the number of bachelor’s degree awards in SEIT fields by 20 percent. The result. 42 percent of all master’s and doctoral degrees granted in the SEIT fields in Massachusetts were awarded to students with these temporary visa degrees. and information technology (SEIT) fields. The biotech sector is a major source of export income for the state. In a field where labor supply already serves as a considerable constraint on economic growth. Nearly three quarters of those who work in the biotech sector have earned a college degree. means that it has helped spark the overall resurgence in state economic activity since the end of 2003. 44 • . engineering. income. but Massachusetts colleges had only a 2 percent rise in degree awards over the 10-year period.Perspective Life sciences talent leadership By Paul Harrington The life sciences industry serves as a core source of growth for the Commonwealth’s economy. combined with its very high levels of worker pay and considerable purchases made from other goods and services producers in the Commonwealth. is a growing share of advanced SEIT degree awards by Massachusetts colleges to foreign students. and employment for the Commonwealth and are clear indicators of labor supply constraints that limit the capacity of the biotech sector to grow and prosper. and that. an extraordinary group of individual in many ways. By 2006. Perhaps the most distinguishing feature of this group is their high level of educational attainment. Four in ten life sciences workers hold advanced degrees. Over the course of the current economic recovery the biotech sector in the state has added jobs at nearly three times the rate of overall payroll employment gains produced statewide. Massachusetts has been unable to keep pace with the nation in increasing the flow of students into graduate programs. and drive of the life science work force. These gains are largely built of the talent. But we also need to develop a set of strategies that can expand the number of native born students who choose the SEIT fields of study at the undergraduate level and to foster the enrollment of SEIT undergrads into graduate programs in these fields. The nation also outpaced Massachusetts in the production of master’s and doctor’s degrees in SEIT fields At the graduate level we have become increasingly dependent on admitting students from overseas who enroll under the temporary F-1 student visa program to fill our SEIT graduate classrooms. A critical challenge for Massachusetts is to expand the available supply of workers with advanced degrees in the scientific.

Part of this low participation rate is associated with low math proficiencies at graduation. so will this super cluster. Through the work at the Massachusetts Life Sciences Collaborative and other efforts. We need to figure out how to raise the math and related literacy scores of these youngsters to provide them with access to among the best sets of jobs in the American economy. We need to start working with middle. Model training programs exist such as the programs at Middlesex Community College and Worcester Technical High School. but we must expand on these types of programs and create better avenues to industry. Too many talented SEIT undergraduates are diverted out of their fields at the graduate level by the lure of high paying jobs that utilize their intellectual skills in nonscientific settings in finance and law. but many of these students—especially young women—opt out of SEIT fields of study at the undergraduate level. we must be proactive and not let our leadership in life sciences slip away to other nations who are aggressively developing their talent. Paul Harrington is associate director of the Northeastern University Center for Labor Studies and co-chair of the Massachusetts Life Sciences Collaborative Human Capital Task Force.Paul Harrington Northeastern University Several alternatives should be considered: • We must address the need to better reward life sciences masters and PhDs to counter the flow of students to MBA and JD programs. we are starting to scratch the surface. • A large proportion of high school seniors have strong math skills. The talent pool in Massachusetts is the primary reason research institutions and companies locate here.and high-school students around a whole set of career and educational decision making activities—to help them make more informed decisions about what to study in college. If this talent disappears. • The share of black and Hispanic high school graduates who choose SEIT fields as their undergraduate majors is very low. but we must boldly continue taking a strategic and collaborative approach. Employment • 45 . Thus.

support. and ultimately to desire to pursue a science career. BSCP’s success is due to its collaborative communitybased philosophy involving academia. The New England Science Symposium. This conference is designed for students from high school to the postdoctoral level and addresses the need for student mentoring. In collaboration with Harvard Medical School. Joan Y. All programs are offered at no cost to the students. the Biomedical Science Careers Student Conference has grown into an event that. support. college. trainees.000 students—including those in middle school. more than 6. our pipeline reaches back to middle school students through the Exploration Program that exposes them to research laboratories.000 volunteers and generous sponsorships by the medical community. physicians. private industry. It is widely known throughout the country as being the definitive model for bringing talented. With the dedicated time and spirit of over 1. and discussions about the importance of academic preparation. grew to include 185 abstracts from postdoctoral fellows. and graduate schools—and 1. In 1991. science career paths. graduate and professional schools. and professional societies.Perspective The importance of training minorities By Joan Reede Joan Reede Biomedical Science Careers Program As founder of the Biomedical Science Careers Program (BSCP). as well as interviewing skills and financial planning. in collaboration with the Massachusetts Medical Society and the New England Board of Higher Education. and nurses—the leaders of tomorrow. saw over 850 students register and was attended by 250 advisors and speakers. To date. educational institutions. in 2008. medical centers. scientists. 46 • . From a modest beginning in 1992.500 to students active in BSCP programs and provides a Linkage Program that connects BSCP students and fellows in need of advice and assistance with BSCP Hope Scholarship recipients. and career development. and graduate students. tools for career development. and the biotechnology and biopharmaceutical industry we have built a pipeline for underrepresented minorities in biomedical sciences and other science-related fields. college and community college students in 2008. The solution for me was to develop a pipeline creating opportunities for young students to get exposed to and excited by the world of science. and professionals pursuing biomedical and other sciencerelated careers and consequently contributing to increase the pool of tomorrow’s scientists. Through annual corporate and foundation sponsorships. Each session of Skills Workshops for College and High School Students provides approximately 250 students and 100 parents with information and guidance in areas such as application process for college and medical. BSCP was a 501(c) (3) organization designed to identify. These programs offered by BSCP take me back to my original vision of building this pipeline. my vision was to develop a program to address the issue of the underrepresentation of minorities in the biomedical sciences and other science-related fields. By 1994. The BSCP students will be among tomorrow’s researchers. launched in 2002. Reede is the dean for Diversity and Community Partnership at Harvard Medical School and the president and chair of the Biomedical Science Careers Program. BSCP was launched by the Harvard Medical School Minority Faculty Development Program. dental. and provide mentoring for underrepresented minority students. public education. medical. disadvantaged youth into a setting where serious discussions about science and future career opportunities can be held. and networking opportunities. medical. dental. The Career Development Series for physicians in postdoctoral training. postbaccalaureates. high school.000 postdoctoral fellows and junior faculty have passed through BSCP. guidance. junior faculty and research fellows provides skills enhancement. BSCP awards Hope Scholarships of $7.

have the potential of bringing sustainable results to our industry and the Commonwealth. The Life Sciences Talent Initiative. is a dedicated group focused on recommending strategies to make Massachusetts the global leader in talented. Employment • 47 . Examples of our student recruitment programs and initiatives include an active MBA program rotation at some of the nation’s best universities. rather than discouraging these students out at an early stage. The Commonwealth needs the critical supply of workers to fulfill the promise of future discoveries that will benefit patients around the world who need our help. these students will have the important advantage of previous biotech industry experience. and trained work forces. we need to address the pipeline issue with special emphasis on life sciences curricula for K-16 students. For example.Perspective The Massachusetts Life Sciences Talent Initiative By Zoltan Csimma Zoltan Csimma Genzyme Since the announcement last year of Governor Patrick’s $1 billion Life Sciences Initiative. In addition. Zoltan Csimma is senior vice president and chief human resources officer for Genzyme. The group’s members represent industry. as well as skills necessary to build the infrastructure that allows us to grow. once established. Massachusetts is fortunate because of the unique combination of environmental factors that have allowed the biopharmaceutical industry to flourish in the greater Boston area. Our situation is not unique and the increasing needs of all companies in the biotechnology industry will only serve to intensify this challenge. COOP programs with local higher educational institutions for specific positions. However. we cannot take these assets for granted. we need better ties with our higher education centers to allow better access to students with the needed terminal degrees. Genzyme experiences daily the challenges of finding individuals who possess the unique skill sets necessary in the life sciences field. This year we were proud to announce the GenzymeUniversity of Massachusetts Scholars Program. Programs such as our partnership with the University of Massachusetts. We also need to create programs that channel more minority students into the life sciences. As one of the world’s largest and fastest growing biopharmaceutical companies. skilled. academia. At graduation. and an active summer internship program that focuses on current college students in relevant degree programs. with products that reach patients in more than 90 countries. distinguishing them as competitive candidates for employment. This is a unique collaboration focused on helping top-performing local students earn paid employment in the biotechnology industry. which I have been honored to chair. We also need to ensure there is a pipeline of future employees who can help us grow here in Massachusetts and around the world. there has been an unprecedented commitment by key stakeholders to ensure there is a full and robust talent pool to meet the ambitious and achievable goals of the program for years to come. through a paid summer internship at Genzyme. specific and coordinated actions will be needed to allow for its continued growth. Continuing to develop and nurture these relationships across key stakeholders will ensure Massachusetts maintains its place as the leader in the life sciences industry. state government. and the work force training system.

and trends shaping the global impact of the Massachusetts life sciences industry . perspectives.Maturing companies Super Cluster II Ideas.

and government forces must work together to develop public policies that encourage the development and commercialization of drugs for the unmet medical needs of our families and friends. Maturing companies • 49 . institutions. which also promote research and provide a place to test new medicines. along with grants and loans that will leverage even more federal and private sector investment. It would make investments in the research infrastructure of the public higher education system. Massachusetts has a major advantage: everything an entrepreneur needs is within a few miles. This thriving super cluster has created momentum. These efforts will ensure that the super cluster continues to grow. We need to work toward new rules that will ease the way for biogeneric drugs while protecting patients. the Massachusetts Biotechnology Council has launched a BioReady Communities Campaign that will help municipalities better prepare for hosting biotech lab and manufacturing facilities. healthier future for the whole world. A significant example of the potential power of such collaborations is the Life Science Initiative currently being debated in the legislation. The initiative would directly foster research with a first-inthe-nation centralized repository of new stem cell lines available to public and private research enterprises. nonprofits. more companies are being drawn to the region. They work closely with premier hospitals. Coughlin Robert K. Robert K. and tax incentives. the initiative would support life science companies through an improved tax structure. A blueprint on how to better coordinate the state’s education assets to meet the work force needs of the sector is contained in the Life Science Talent Initiative Study sponsored by the MBC and the Life Science Center. if not right next door.Perspective Bay State’s super cluster provides optimal ecosystem for innovation By Robert K. important discoveries. Just as importantly. We need to find ways to keep medicines affordable without imposing price controls that could hinder investment in drug discovery. Coughlin is chief executive and president of the Massachusetts Biotechnology Council. We also need other policies that will foster growth such as reasonable limits on interactions between industry marketers and academia that won’t hinder communication or collaboration. and ultimately new treatments and cures to improve lives. we need to help companies establish themselves and grow by making it easier for them to find appropriate locations and move through the permitting process. This is all supported by a strong venture capital network always on the lookout for new concepts. At the same time. new infrastructure. Uniting these forces and serving as a voice for the industry are key missions of The Massachusetts Biotechnology Council. These institutions are surrounded by hundreds of companies of all sizes providing unlimited opportunities for collaborations and partnerships. Our world-class universities foster groundbreaking research while training some of the best and the brightest minds in the world. These companies will make this area even more attractive. enabling even more groundbreaking research. we need to encourage science education at all levels to ensure a strong pipeline of students who embrace the life sciences as a career path. Industry. Finally. Because so many resources are readily available. Toward that goal. Coughlin Massachusetts Biotechnology Council When it comes to competing for life science companies. this tremendous ecosystem must be carefully maintained and promoted if we are to live up to our full potential to create a safer. Still. That plan will pump more than $1 billion into the sector through direct grants.

and then there are people who are consultants. We were able to build this foundation of tens of thousands of jobs. and then there are the venture capital guys. Now you have these hugely cash-flow-positive businesses bringing in all of these fantastic people. Millennium. not just funding them. They tend to be run by folks who have developed a product before and are spinning out of an existing company rather than from a world-class university. I was always most interested in starting companies. On Massachusetts’ future For all of our advantages. That’s the moral imperative. so I left venture capital. I did an MD and a PhD at Harvard Medical School. Number one is to bring a drug to market to help people. and trying to lure away our biotech entrepreneurs.Interview Christoph Westphal On how I got here I always wanted to try and turn science into drugs. On building a successful biotechnology company The way you build every company is with a hope to become a cash-flowpositive. starting up companies. Number two is to ensure your employees have the best possible futures. And then when I started Sirtris. I thought I should spend a couple of years understanding how businessmen think. And number three is to generate returns for your investors or shareholders. We’ve got great companies. motivated folks who really care passionately about discovering and developing drugs. And then I decided I should learn how people put money into these companies. sustainable business like a Genzyme or a Biogen. because they want to start important new companies and this is the place to do that. I decided that I might as well enter management full time. so I joined Polaris Venture Partners. and heard that there are people who start companies. of smart. We face a lot of problems—not only high business costs but also a lack of affordable housing and clogged transportation. and that will be the foundation of growth for all of these biotech companies that are hoping to go cash-flow positive at the end of this decade. which is a consulting firm. Other states and countries are taking advantage of this. The differences between Boston and Silicon Valley San Francisco has great biotechnology companies. We have every single skill set you need to start and nurture an important new biotechnology company. If we don’t face up to 50 • . But if you’re interested in fundamental. then the Boston-Cambridge area is the best place in the world. And the right way to build such companies is to focus on three things. so from the day I started in venture capital I really was a serial entrepreneur. more recently. such as Genzyme and Biogen and. my entire time in venture capital was starting companies. I see a lot of people from California moving to Boston. our continued leadership in biotechnology and the life sciences is not guaranteed. earth-shaking discoveries and turning them into drugs. On the foundation of the super cluster We were fortunate enough to reach critical mass in Massachusetts with some biotechnology firms that went cash-flow positive. serving as CEO and so on. That’s because Harvard and MIT and these other institutions are here. and so I went to McKinsey. We’ve got great research. Basically. And that’s how I ended up here.

Dr. Hopefully. or not locating here in the first place. not only within the industry but also among leaders such as Senators Kennedy and Kerry. we could see people leaving. I see some really positive signs. Maturing companies • 51 . It’s happened before: the guys who set up the information technology industry were from Boston. or Shanghai. we’ll keep a lot of the entrepreneurs and innovators here in Boston and not have them move to Silicon Valley. such as Chris Gabrieli. Westphal previously co-founded and served as CEO of Alnylam Pharmaceuticals and Momenta Pharmaceuticals. and they are rallying resources to help keep the smartest folks here. These people are doing a fantastic job of working really hard to stay ahead of the curve. Formerly a consultant and a general partner in a venture capital fund. Westphal has been lead author on several patent applications and is a contributor to professional journals. Governor Patrick’s biotechnology initiative has generated a lot of excitement. these challenges. Dr. which he co-founded in 2004. a NASDAQ-listed company.Christoph Westphal is the CEO and vice chair of Sirtris Pharmaceuticals. both of which are also NASDAQ-listed. or wherever else people are seeking to build centers of excellence in the life sciences. and folks who are really influential in the community. The state’s leaders have focused people on how innovative healthcare and science can be an incredible driver for economies. and a lot of them left for Silicon Valley.

discovering and developing drugs. and delivering to patients important new medicines is hard to imagine occurring in any other locale. and collaborations with world-leading medical researchers—all from within the greater Boston community. developing. and. second. 52 • . rather. Holtzman Steven H. Infinity’s success in discovering. Holtzman is chair. Founded and based in Cambridge. Holtzman Infinity Pharmaceuticals The creation and growth of biotech companies based on the development of innovative new medicines requires a unique amalgam of diverse expertise and. These entrepreneurs are not your ordinary business people. to maintain a positive attitude and an integrated perspective that enables them to navigate their nascent enterprises through the multifaceted obstacle course. The foundation of a successful young biopharmaceutical company rests on four pillars: First. to recognize and embrace risk—to see in great detail all of the potential pitfalls and hurdles involved in building a company from scratch. Steven H. They must have the ability not to abjure risk. As the life sciences (and their fruits in the form of innovative medicines) gain an increasing importance in our country and the world’s economy. Other places in the United States and in the world may have present one or more of the four essential elements. and chief executive officer of Infinity Pharmaceuticals. Capabilities and success on each of the four fronts is absolutely necessary for the creation of a thriving biotechnology company and for the development of innovative new medicines. financial backing from leading life science venture capitalists. risk capital.Perspective Covering all the bases: biopharmaceuticals and Boston By Steven H. sources of capital and financing which are cognizant of the time-frame and risks inherent in developing a drug. notably enough. in the face of the knowledge of all of the obstacles. And. and depth that it has reached a critical reactor mass that is virtually self-feeding. attitudes. third. and lastly. but. cutting-edge academic and industrial life-science research and technology. none standing alone is sufficient. Infinity began with a novel technology from Harvard. is arguably unto itself in having them all and having them at a level of such quality. yet. a management team of successful biotechnology and R&D executives. the significant opportunity and fertile ground for the growth of the life sciences in the Boston area. president. while each is necessary. it is this distinctive and extraordinary fusion of science. a unique breed of entrepreneurial business people. The Boston area. world-class expertise in medical research and clinical translation. Infinity Pharmaceuticals exemplifies the combination of world-class resources necessary to build a company with enormous potential. breadth. however. medicine. and entrepreneurship within our Commonwealth that sets Massachusetts apart as a world leader. and bringing those medicines to market. but. Therein lies not the challenge. rather.

Perspective Innovative medicines based on a breakthrough discovery By John Maraganore John Maraganore Alnylam Pharmaceuticals Alnylam Pharmaceuticals. Alnylam has been very successful across business initiatives as we leverage our intellectual property and know-how to apply to the discovery and development of novel therapeutics. Alnylam has numerous collaborative relationships with leading academic institutions. among others. represents a completely new approach to drug discovery and development. and Huntington’s disease. with a strong record of peer-reviewed scientific publications in the world’s top journals including Nature. Alnylam was founded in 2002 by. is developing a novel class of innovative medicines based on a breakthrough discovery in biology known as RNA interference. In addition. and its discovery has been heralded as a major scientific breakthrough that happens once every decade or so. Nobel-laureate Philip Sharp. It is based on technology initially developed at MIT and the Whitehead Institute. Today. and subsequently raised approximately $200 million in the public markets and $500 million through our transformative alliances with top-tier biotechnology and pharmaceutical companies including Novartis and Roche. Our strategy at Alnylam is to lead the translation of the science of RNAi into a robust drug discovery capability and to build a significant product pipeline of innovative medicines that we commercialize alone or with collaborators. we have been delivering on our mission of becoming a top-tier biopharmaceutical company. We have maintained the same commitment to high quality science as our founders. or RNAi. This environment. In addition to maintaining a position of scientific leadership. many of which are located in the greater Boston area. Maturing companies • 53 . Over the last five years at Alnylam. We have built a broad pipeline of RNAi therapeutics. John Maraganore is chief executive officer of Alnylam Pharmaceuticals. among other diseases. and Cell. we are developing RNAi therapeutics for the treatment of hypercholesterolemia. based in Cambridge. combined with our unparalleled intellectual property position for RNAi therapeutics and our industry-leading alliances. The proximity to these centers of excellence is a significant part of what has made Alnylam so successful. a natural process for gene regulation. We initially raised $40 million in venture funding in 2002 and 2003. Our efforts are well underway in a time when the pace of biomedical discovery is faster than ever. The region is known as one of the world’s most innovative and vibrant scientific and business environments. and the hunger for innovative medicines is greater than ever. we have invested over $300 million in translating the science of RNAi towards therapeutic products. To date. Nature Medicine. With RNAi technology. our most advanced program is in Phase II human clinical trials for the treatment of respiratory syncytial virus (RSV) infection. we have the opportunity to treat disease and impact the lives of patients in a fundamentally new way: by silencing diseasecausing genes upstream of today’s medicines. which translates into a rich source of the best and brightest scientists as well as a dynamic setting for the development of novel ideas and approaches. RNAi. both in Cambridge. and have become one of the top biotechnology companies in the United States. liver cancers. we are recognized as the leading biopharmaceutical company developing novel RNAi therapeutics. creates a unique opportunity for Alnylam to build a leading biopharmaceutical company.

Clinical trials Super Cluster II Ideas. perspectives. and trends shaping the global impact of the Massachusetts life sciences industry .

capabilities. Massachusetts will continue to be a major center for drug and device development. Key factors driving interest in these emerging regions for clinical research also include sophisticated healthcare systems in many countries. Josef H. Today. and eClinical platforms. adaptive trials. Especially in emerging locations for clinical development. requiring more patients. As clinical research experiences even greater globalization. biopharmaceutical companies are increasingly seeking to develop and commercialize products for regional and international markets. To ensure success. and a history of conducting successful. while taking advantage of the wide range of development opportunities globally. As home to some of the world’s leading biopharmaceutical companies and premier medical institutes.Perspective Global opportunities for clinical trials By Josef H. it is imperative that the Massachusetts-based biopharmaceutical industry take strides to continue to generate incremental growth in clinical research locally. It is vital that clinical research organizations have wellestablished local capabilities and expert resources. it is essential to have access to a network of qualified investigators and familiarity with the myriad regulatory and operational differences for conducting clinical studies in various countries. the smallest to the largest companies based in Massachusetts can take advantage of this global research opportunity by working with outsourced global partners that have local operations in numerous countries. von Rickenbach Josef H. Small and emerging biopharmaceutical companies with limited infrastructure and expertise can especially benefit from the breadth and depth of expertise. cultures. In the past. A biopharmaceutical company can obtain the same high quality clinical research and global standards from any of their partner’s locations worldwide. which are influencing the direction of clinical development. Additionally. In order to keep this innovation thriving. As we are able to detect safety and efficacy signals and identify and select the most promising compounds earlier we will be able to bring novel treatments to patients sooner. breakthrough discoveries here will continue to contribute to development of important treatments to benefit the lives of current and future generations worldwide. These types of partnerships provide a gateway to global markets. Combined with this global challenge is growing study complexity. experience working with the regional regulatory authorities. The life sciences industry in Massachusetts is a vibrant part of emerging solutions in many key areas. Clinical trials • 55 . providing sufficient flows of patients for important studies. The Commonwealth will continue to be a major contributor to advancing of the worldwide success of the biopharmaceutical industry in preventing and curing disease. further driving the growing need to conduct studies throughout the world. and medical approaches. barriers to conducting global clinical studies may have included lack of data standards and differences in local customs. biopharmaceutical companies can benefit from rapid patient recruitment and lower costs of conducting studies. such as the Asia-Pacific region. and access that global clinical research organizations such as PAREXEL can provide. the availability of highly trained professionals. The region has one of the highest levels of clinical activity among traditionally large healthcare cultures. ICH-GCP clinical studies in a wide array of geographies. von Rickenbach is chairman and chief executive of PAREXEL International. von Rickenbach PAREXEL International Clinical studies have continued to expand in number and complexity. and attractive end markets for biopharmaceutical products. such as personalized medicine.

had fewer trials per capita in 2007 than any of the peer metropolitan areas. New York data was unable to be found specifically. Florida 4 I II III IV 6. with 5. Florida. home to 3. Boston I II III IV 3. Massachusetts 14 I II III IV 10.106 826 256 targeted search procedure Source: Clinicaltrials.143 clinical trials in 2007. Table 25. Philadelphia. The Commonwealth. of National Institutes of Health. as shown in Table 23. Texas. Rank and number of clinical trials by state Clinical trials national rank 1. Maryland.271 398 928 717 228 1.476 473 1.435 158 551 599 127 6% 7% 7% 7% 7% 8% 8% 10% 11% % National total 12% Table 24.632 444 1. US Census Bureau 2007 population estimates Note: Data found by using Clinicaltrials. of National Institutes of Health.486 173 632 567 114 targeted search procedure.563 297 692 464 110 1. North Carolina 12 I II III IV Phase Open trials 2. and several others in hosting clinical trails for new medications. perspectives. because it benefits from the National Institutes of Health headquarters in Bethesda. US Census Bureau 2007 population estimates Note: Data found by using Clinicaltrials. Rank and number of clinical trials by state Clinical trials national rank 1.524 318 655 453 98 1. pharmaceutical companies may shift more clinical trials outside the United States.033 145 422 384 82 989 157 360 364 108 4% 5% 5% % National total 7% Source: Clinicaltrials. about three-fourths the number of trials that Houston had the same year. established healthcare systems. Ohio. Houston I II III IV 2. falls behind California. Texas 2 I II III IV million residents.033 clinical trials in 2007—more trials per capita than either Boston or Houston. MD. the 19th most populous state. compared to 5. New York 3 I II III IV 4. had 1.6 million. Pennsylvania 6 I II III IV 5. As life sciences continues to evolve into a global Ohio 7 I II III IV 8.560 171 620 648 121 1.693 186 697 658 152 1.5 million residents. the 14th most populous state. according to July 2007 metropolitan statistical area figures from the US Census Bureau.475 228 572 514 161 1. New York. especially to markets with trained professionals. Looking solely at metropolitan areas. and lower research costs. as seen in Table 25. The Chicago metropolitan area. Illinois 5 I II III IV 9.748 247 679 650 172 1. is the only one that routinely receives a disproportionate number of clinical trials. Super Cluster II Ideas. Boston’s metropolitan population is approximately threefourths the size of Houston’s: 4. Maryland 19 I II III IV 7. Boston hosted 1.019 793 191 2. Philadelphia I II III IV Phase Open trials 1.States larger than Massachusetts are grabbing a greater share of clinical trials.4 million people. and trends shaping the global impact of the Massachusetts life sciences industry .143 207 477 355 104 1. Chicago I II III IV 4. California Population rank 1 I II III IV 2.

John Glaser. In light of growing global competition. Clinical trials performed by Massachusetts’ world-class academic health centers and hospitals provide a valuable service to our life sciences companies in expediting the prompt review of new drugs and devices by the FDA. This effort routinely takes ten to 15 years to complete and generally costs upwards of $1 billion. It is critical that the Massachusetts life sciences community distinguish itself through investments that will reduce costs. physicians and commercial centers around the world. Most of this research is designed specifically by the manufacturer to meet the requirements of the FDA to support approval and marketing of new uses or claims of superiority relative to existing treatments. Translation of fundamental and basic discovery to useful. Our Biomedical Research Institute. clinical and translational research. Zak Kohane and Dr. i2b2 is working to develop software and related technology tools to exploit rich clinical. dose ranging. clinical trials. Gary Gottlieb is president of Brigham and Women’s Hospital. it is imperative to build on our innovative prowess to enhance and improve on the way we do clinical trials and research. is working actively to increase efficiency and access to clinical populations for research participation in the Harvard/Partners HealthCare system. clinical research plays an integral role in our mission to provide quality care for patients. and. an international leader in basic. One such initiative. FDA approval. Finally.Perspective Initiatives in clinical research to provide quality care to patients By Gary Gottlieb Gary Gottlieb Brigham and Women’s Hospital The process of bringing a drug or other treatment to market includes basic and developmental research. with annual funding in excess of $425 million. However. these trials may provide access to cutting-edge innovations for the patients in our community. improve approval and recruitment efficiencies. tissue. The business of performing clinical trials produces approximately $10 billion to $20 billion in revenue for hospitals. the conduct of clinical trials provides additional revenue to the institutions. The BWH’s Center for Clinical Investigation assists investigators to conduct their clinical studies more efficiently and effectively by providing a range of research and support services. Clinical trials • 57 . efficacy. tolerance. Informatics for Integrated Biology and the Bedside (i2b2). scientists and faculty. At Brigham and Women’s Hospital (BWH). i2b2 is creating newly configured resources to allow investigators to access a database of digitized data across the Partners system to better identify clinical problems and deidentified populations with specific diagnoses as well as populations that may be approached for consent to be contacted and offered participation in approved protocols. and toxicity. is supported by over 800 physician-investigators. Ultimately. safe and effective clinical diagnostic procedures and novel treatments is a tenet of the mission of the great academic medical community of Massachusetts. Among its goals. i2b2 was created in 2004 as an NIH-funded National Center for Biomedical Computing based at Partners HealthCare System. A longterm successful partnership with industry will ensure that our local population has access to innovation and advanced care while our clinicians and scientists can translate discovery to care and be the earliest adopters of improved tools and therapies. if successful. Early experience suggests that the merging of clinical phenotypic data with data derived from well characterized tissue will reduce recruitment costs and time remarkably. The i2b2 Center is led by co-Directors Dr. and other available phenotypic and genotypic data repositories. In addition. trials must be performed on large enough diverse populations and under adequately controlled conditions to determine whether they will become useful therapies. numerous investigator-initiated studies are funded to support unique scientific inquiry. and create novel approaches to clinical investigation if we are to compete effectively in this arena. Clinical trials reflect the critical phase of this process that allows new or existing molecules or devices to be tested for safety. often leveraging other related research activities and funding. pharmaceutical and device companies contract directly with health care providers or through clinical research organizations (CROs) to enlist both healthy and medically ill human volunteers to participate in these studies. Typically. Clinical trials reflect a very competitive multibillion dollar opportunity.

We encourage our researchers to collaborate and expand their scope of knowledge by participating in unique research rotations. Indeed. coupled with strong leadership and forward thinking. or the creation of a new molecular entity. has allowed BMC to become a clinical home for some of the world’s finest clinicians and researchers. and is the primary teaching hospital Boston University School of Medicine. which coalescences a wealth of highly enriched resources. Every day the molecular underpinnings of disease etiology and progression are being uncovered. we support building partnerships among National Institutes of Health CTSA awardees. and seek to work with industries that support clinical research. the journey from lab bench to bedside relies upon innovative research and strong executive strategy. Because the process of translating research results into to clinical therapies can often be long and inefficient. novel clinical therapies are reaching those patients whose lives depend on them most. advances in biomedical science are changing the world we live in at the speed of light. we have responded by building a systematic infrastructure to support biomedical research and have expanded our ability to meet the demands of clinical investigation in the 21st century.Perspective Translating research results into clinical therapies By Elaine Ullian Elaine Ullian Boston Medical Center From nanomedicine to epigenomics. both locally and globally. Ultimately. and Boston University Medical Center Hospital. Elaine Ullian is president and chief executive officer of Boston Medical Center. The medical center is in partnership with 15 community health centers. The strength of this partnership. 58 • . offers a full spectrum of primary and specialty care. and ethically. reach out to local community organizations. Boston Specialty and Rehabilitation Hospital. We will work to continually promote the integration of our intellectual and technological resources in a way that measurably transforms the way patients receive their care. Whether it’s a new clinical treatment or isolation of a gene. Together. As a result. Boston Medical Center (BMC) is proud to be positioned at the forefront of such critical and exciting biomedical advancement at this pivotal time. BMC and its partners support a new and dynamic infrastructure that will prove to advance medical science quickly. or by completing a practicum that broadens their area expertise while building new relationships. this will allow us to deliver the latest and greatest in clinical therapies to patients and underserved populations. efficiently. BMC was formed from a merger of Boston City Hospital.

India. these trials are being conducted on a global basis with sites throughout the United States. We believe that by targeting multiple physiologic pathways and hitting multiple targets within the body. We continuously reload the CombinatoRx product pipeline each year with programs from our highly productive drug discovery engine. In addition to CRx-102. Russia. specifically focused on discovery and development of treatments for infectious diseases such as hepatitis C. and Brazil. once-daily capsule. chief executive officer. we seek out source materials. and the United States. Based on these positive results. developing a topical formulation where none had existed before. skills. For example. where CRx-102 demonstrated a statistically significant reduction in pain. for example. a revolutionary new class of drugs. our partnering strategy is to retain ownership past the major value inflection points of phase 2 data and commercial product formulation to capture the greatest potential value for our assets and then to seek partners for further development and commercialization. we are awaiting phase 2 clinical data on multiple other product candidates during 2008. We believe that executing on this strategy will drive two truly important achievements: the creation of important new medicines for patients and the establishment of a sustainable company. and founder of CombinatoRx. Over the first five years of our history. we have a subsidiary in Singapore. We are not just identifying and validating synergistic combinations. By using our proprietary technology. CombinatoRx is leverage the strength of our drug discovery engine through valuable research collaborations. doing each where it makes the most sense. this technology was built. we will find novel ways to better treat a wide variety of serious diseases. selective medicines through our drug discovery engine. we have advanced CRx102 into later-stage clinical trials in both OA and RA. As one example. CombinatoRx intends to accomplish its business goals while maintaining its financial strength. Canada. as well as improvements in stiffness and in tender and swollen joints. For our clinical-stage product candidates. CRx-102 additionally met its primary and secondary endpoints in a rheumatoid arthritis (RA) trial. but equally importantly. Alexis Borisey is president. Argentina. In other cases. This global reach offers both strategic and tactical advantages. continuing our scientific innovation and realizing the vision to create synergistic. Through these collaborations we acquire substantial financial resources for our development programs and gain the ability to expand our technology into new therapeutic areas while maintaining valuable product rights for CombinatoRx. CombinatoRx is launching a proactive product partnering campaign during 2008 and 2009. a standard measure of disease improvement. we are developing these novel combinations in proprietary formulations to optimize their product profile by improving their therapeutic index (tolerability and efficacy). With multiple Phase 2 data sets expected this year. CombinatoRx invented and built a drug discovery technology to translate this promise of synergistic combinations into a robust pipeline of product candidates. we discover combinations with selective mechanisms of action that are created by the special synergy between two drugs. Much of our product development work including preclinical testing. we are creating a new route of administration. formulation and manufacturing is being conducted in China. with statistically significant ACR20 response. and a broad pipeline of multiple drug candidates in phase 2 trials was created. Europe. Clinical trials • 59 . Europe. We see this as a global business and. We have demonstrated translation of our novel drug discovery approach with concrete clinical proof-ofconcept data in a number of product candidates.Perspective Synergistic drug combinations for treating serious diseases By Alexis Borisey Alexis Borisey CombinatoRx CombinatoRx was founded in 2000 with a vision of creating synergistic combination pharmaceuticals. innovation and clinical trials on a global basis. For example. South Africa. the synergistic combinations were shown to work in model systems. with CRx-102 we are co-formulating the agents to optimize their release profile by creating a single. we presented positive clinical results in a trial of CRx-102 in hand osteoarthritis (OA). developed in collaboration with the economic development board of Singapore. therefore. In addition to productspecific partnerships.

Biomedical manufacturing .

with additional life sciences companies moving their manufacturing operations into Massachusetts. Despite hurdles. some plan to pursue cost-effective manufacturing alternatives elsewhere—a cause for concern for the Commonwealth. AVANT Immunotherapeutics. These and other resources will propel the industry in the future. Companies point to Massachusetts’ skilled work force as a primary reason for manufacturing in the state. Biomedical manufacturing • 61 . Shire PLC. the University of Massachusetts’ BioManufacturing Center in Lowell. and more leading device and biopharmaceutical companies have announced plans to establish or expand operations in the Commonwealth. these companies are moving their manufacturing to Europe and Asia. including the high costs of living and labor. and Wyeth Pharmaceuticals. As with research and development. manufacturing in the life sciences cluster has quietly expanded and grown stronger. Despite these strengthening fundamentals. Haemonetics. manufacturing operations have decreased in almost all industries across the Commonwealth. and heavy taxation burdens. Boston Scientific. While the majority of companies with manufacturing activities in Massachusetts plan to maintain or increase their manufacturing work force inside the state. Bristol-Myers Squibb is on track to move some of its operations to the state. as well as to other US states. Massachusetts is currently home to one of the largest biomanufacturing facilities in the United States. which is pioneering the development of single use manufacturing technology. are all focused on developing products to optimize biopharmaceutical manufacturing. Covidien. Massachusetts continues to struggle with various factors. However. Millipore’s new Bioprocess R&D Center and private companies like Xcellerex. For example. for the same primary reason: access to lower-cost skilled labor. These factors play a crucial role company’s decision of whether to establish large-scale biomedical manufacturing operations in the Commonwealth. MIT’s Industrial Performance Center. its new campus will eventually employ 550 people.An overview of biomedical manufacturing in Massachusetts Over the past five years. Massachusetts currently boasts a number of biopharmaceutical manufacturers. Existing biomedical manufacturing companies here include Abbott Laboratories. inefficient permitting procedures. Genzyme. Philips Medical Systems.

biotechnology drug sales are expected to outpace those of conventional small molecule pharmaceuticals. Singapore. explore. autoimmune disorders. Despite the challenges. Life science researchers continue to look for faster ways to screen and identify new drug candidates. After development. It will open in 2009 and is being designed to support biopharmaceutical manufacturing. is a rapidly growing manufacturing area for Western companies. and infrastructure. recombinant proteins. and biogeneric manufacturing. Dr.Perspective Global growth By Martin Madaus Martin Madaus Millipore Corp. In the years to come I have no doubt that we will continue to expand our global operations as we invest in people. drug development clinical trials. today’s biotech companies are increasingly forming global partnerships. it is important for us to provide both global and local support. and services that aid biotechnology companies in the development and manufacture of new drugs. for example. we have been part of the development and manufacture of innovative biotech drugs such as monoclonal antibodies (MAbs). 62 • . With this rapid growth there are also industry challenges. and optimize their separations. chief executive officer. which have led the way for cuttingedge therapies in the treatment and prevention of cancer. and president of Milipore Corp. As the industry matures. while India and China are providing new avenues for research. tools. there are also many new opportunities in fast growing markets. greater governmental restrictions on prescription drug reimbursement. and vaccines. Many of our large multinational customers have developed research. and the loss of sales from older biotech drugs due to patent expirations. As many of our customers are developing overseas operations in these countries with the same quality standards found in North America and Europe. With roots in Massachusetts for more than 50 years. Martin Madaus is chairman. and infectious diseases. development. while others have made significant direct capital investments in Asia. Companies are also under increasing pressure to improve their development and manufacturing processes while working within regulatory constraints. There is increasing competition for disease targets. Our customers in that part of the world will be able to investigate. Millipore has been part of the biotechnology industry’s growth from its beginnings. We recently announced plans to open a new state-ofthe-art applications and training facility in Singapore. training. and manufacturing partnerships with local manufacturers. manufacturing sites are focused on streamlining productivity while maintaining a high degree of product safety and quality. In coming years. This trend creates a fast growing market for products. purifications and monitoring processes with the unique support Millipore provides.

when combined with emerging capabilities in places like Ireland and Singapore. We must continue to train and encourage the next generation of biomanufacturing talent. and today some of these leaders are training the next generation of bioprocessing experts here. regions like Massachusetts will have to work aggressively to stay at the forefront of biomanufacturing. Current developments in biomanufacturing technology are dramatically changing production processes and will directly affect timelines and costs. Harvard. Less well known is that the Commonwealth is also preeminent in biomanufacturing technology. Northeastern. the entrepreneurial biopharmaceutical culture creates a base of firms involved in early state manufacturing because of their engagement in the development of new drugs. seem likely to change the biomanufacturing landscape in the years to come. work force development. As companies develop greater confidence in their biomanufacturing processes. Second. these firms. Dr. are at the forefront of innovative technologies that are fundamentally changing the way biologics are made. Richard Lester is director of the Industrial Performance Center at the Massachusetts Institute of Technology. and plant operators. First. These innovations. Public policy has a role to play—in tax policy.Perspective Massachusetts’ manufacturing strategy By Richard Lester Richard Lester MIT Industrial Performance Center Massachusetts is known around the world for its outstanding contributions to fundamental research in the life sciences. design engineers. This is particularly important for emerging companies. The complexity of biomanufacturing and its importance to the drug development process create powerful incentives to keep it nearby. Massachusetts’ strength in biomanufacturing depends upon three competitive advantages that it must continue to cultivate if this economically important activity is to grow in our region. along with our region’s strong research institutions such as MIT. Many of the pioneers in biomanufacturing began their careers in Massachusetts. including such specialists as research scientists. and talent pools as well as tax incentives draw commercial-scale manufacturing to new locations around the world such as Singapore and India. Biomedical manufacturing • 63 . and the University of Massachusetts. their futures may rest on a single product. These formidable assets are not easily replicated. Finally. physical infrastructure—but equally important is our entrepreneurial environment and the foundation of high quality public spaces for innovation on which it rests. and quality and reliability in the manufacturing process often trumps cost. the talent that has developed over three decades in the region is a critical magnet that must be fostered and nurtured. These technological strengths will attract companies that are serious about investing in their own biomanufacturing capabilities.

Africa. and New Zealand. researchers and companies all over the world turn to the Massachusetts super cluster for groundbreaking ideas. Life science leaders in Massachusetts are learning to say hello in many different languages. Super Cluster II Ideas. Canada. and trends shaping the global impact of the Massachusetts life sciences industry . building scientific relationships. with the ability to enrich lives everywhere? How does the Commonwealth transform itself into the premier worldwide hub for life sciences research and development? The answers are waiting to be discovered. Guten tag. Australia. Asia. Ni hao. and crafting business deals with peers in Europe. and products. Konichiwa. perspectives. At the same time. The implications will reverberate around the world. How does Massachusetts transform local ideas into global businesses. initiatives. They are trekking the globe. Latin America. Hola.Global companies Jambo.

even as they unveil a picture of daunting complexity. BI3 makes investments in preclinical ideas that are two to three years away from entering formal studies necessary to get IND approval. The concentration of scientific excellence. and scientific assistance to allow them to rapidly convert novel biological insight into life-saving and life-changing therapeutics. At the end of the research program. BI3 has launched three companies and is an example of an innovative business model that efficiently tackles the challenge of transforming scientific discovery into advances in human healthcare. entrepreneurial spirit. At the same time. especially those that feature a versatile technology platform and a seasoned management team. laboratory and office space. To this end. or commercial issues. Global companies • 65 . which generate a plethora of novel opportunities for targeting the molecular basis of many important diseases. regulatory. Large drug discovery companies increasingly depend on partnering with academia and small biotech firms to complement their internal R&D efforts by accessing external innovation. Furthermore. and startup/big biotech partnering and blends them into a new approach. yet they are offered the opportunity to tap into Biogen Idec’s experience in bringing drugs to market by consulting with Biogen Idec experts in drug discovery. and drug discovery experience in Massachusetts made it the natural location to implement this organizational experiment. Biogen Idec. business support. focused research plan. Academic researchers with novel potential drug candidates are faced with an economic climate that makes access to capital a challenging endeavor. or BI3 in short. BI3 allows portfolio companies to leverage Biogen Idec’s technology platforms on an as-needed basis. the applied nature of the work required to convert an early drug lead into a promising development candidate typically puts such programs outside of what agencies such as NIH are willing to fund. Biogen Idec has an option to acquire the company and hence take on responsibility for. thus creating a formidable funding gap. The Biogen Idec Innovation Incubator. economic development incubators. and the risk of. Rainer Fuchs is vice president and executive director of the Biogen Idec Innovation Incubator. Most importantly. BI3 offers laboratory and office space within walking distance of some of Cambridge’s premier research institutions. startup creativity. heightened regulatory hurdles. In addition to supplying the financial means required to complete a milestone-driven. development. such as payroll. clinical development. Many venture firms have become more risk averse and prefer investing in more mature opportunities. HR. A key objective of BI3 is to enable its portfolio companies to devote all their attention to advancing their drug discovery programs. the burgeoning costs of health care. BI3 provides entrepreneurially-minded founders with capital. The BI3 model takes pages from the playbooks of traditional venture funding.Perspective BI3—a new model for transforming discovery into therapeutics By Rainer Fuchs Rainer Fuchs Biogen Idec We are living in a time of unprecedented advancements in basic science. BI3-funded companies are free to pursue their activities completely independent of. To address this gap. BI3 provides or arranges for many of the administrative aspects of running a business. The mission of BI3 is to create an environment that combines the entrepreneurial energy and the incentive systems of a startup with the deep drug discovery expertise and technology capabilities of one of the world’s most successful biotechnology companies. and IT. BI3 investments focus on what is sometimes dubbed “the valley of death”: the transition of innovative research from an academic setting to an early-stage company. and without interference by. was launched in 2007. At the same time. and a stagnant number of approvals of new medical entities create immense pressure on Big Pharma and big biotechnology firms to rethink their operational model in order to improve productivity.

for the treatment of complicated skin and skin structure infections (cSSSI). this company was talking to large pharmaceutical companies about licensing and copromoting Cubicin in the United States. targeting an untapped field for antibacterial drug discovery: tRna synthetases. We believed that a daptomycinbased cream would avoid the adverse effects that Eli Lilly observed during its Phase II tests. after forging technology-validating partnerships with three large pharmaceutical companies. We negotiated a backend. Bonney Cubist was founded in 1992. We began evaluating daptomycin. we started hiring a sales force. in part. It became clear that other firms wanted to position our drug as a niche vancomycin-resistant enterococci (VRE) therapeutic. because of toxicity issues that developed during the tests. Cubist saw an opportunity to formulate an acne-treatment cream from a daptomycin. I joined Cubist in 2002. By 1997. a full dose delivered once a day was just as effective—and had significantly fewer adverse effects—than partial doses taken several times a day. skeletal muscle toxicity. and agreed with the FDA to submit a new drug application just based on skin studies. We also thought that more clinical trials would be needed to support the VRE labeling. Even though Cubist had $240 million in convertible debt at the time and just $100 million in cash. and began our transition from a purely R&D-focused company to a commercial enterprise. We proceeded with the cSSSI filing and prepared to market Cubicin as an antistaph drug. We launched the drug in the United States in November. we learned why the drug had failed its hCAP tests. Cubicin® was approved by the FDA on September 12. just after the company had completed two successful Phase III trials in complicated skin trials. our management team was eager to bring a later stage antibacterial asset to help us accelerate growth at Cubist. I was told that the first of two Phase III trials for hospitalized Community Acquired Pneumonia (hCAP) had been completed and the drug had just missed its prespecified endpoint. The Cubist team studying daptomycin wanted to know more about some of the effects reported during the Eli Lilly trials—specifically. In 2003. Our experiments found that. Because of these findings. 2003. a drug Eli Lilly had taken to Phase II trials several years ago but abandoned. Cubist believed Cubicin would be better marketed as an antistaph and anti-MRSA drug. which can be used to treat serious infections caused by gram positive bacteria such as MRSA. weighted deal to acquire the rights and intellectual property to daptomycin. our board of directors believed our company was in the best position to explain the benefit of our product to customers. When I arrived. making scientific liaisons. 66 • . Four years later. which would delay the NRA for a number of years.Perspective Lessons learned—our transformation from R&D to a commercial enterprise By Michael W. On my first day. the company went public. despite conventional wisdom. we shifted the focus of our daptomycin program toward creating an intravenous antibiotic. That year.

at Biogen. Feedback from our customers validated our decision to position our drug as an antistaph agent. It was a very busy and exciting time and it led to the most successful launch of an IV antibiotic in US history. Don’t lose sight in the excitement of the first launch that it is critical to have an Act Two. becoming more systematic in its approach to compliance and risk management. well thought-out launch plan. 3. Here are some lessons from our experience: 1. 6. Change and turnover in the top ranks are inevitable. although it is evolving. and to prepare them for the changes to come. Michael W. 4. 2. Often the leaders who bring an organization to the cusp of commercialization either aren’t interested in the next stage or require the acquisition of new skills. Global companies • 67 . Even with a thorough. Bonney Cubist I had been through a transition like this before. and. and creating an accounts receivable organization. It must be managed in such a way that members of the organization feel reassured that the original culture isn’t being abandoned. both quantitative and qualitative. Companies should strive to keep the fundamental entrepreneurial spirit that brought them success.Michael W. We held a series of employee meetings to let everyone know the rationale for our decisions. Set expectations appropriately. Opportunity seeking behavior is a hallmark of entrepreneurial culture. Data on what was happening in the marketplace. even in a company with a wildly successful first launch. spending more time planning for and managing the expenses of the company. We used that feedback to refine our message. was critical for internal decision making and to keep the capital markets up to date on the launch. and so on. Bonney is president and chief executive officer of Cubist. Keep both constituencies appropriately informed of results and the learning. both internally and externally. management thinking may shift from opportunity-seeking to loss avoidance. It is always easier to deal with a positive surprise than a negative one. and knew that communication would be key to our success. the market will teach you valuable lessons that can improve performance if you are prepared to learn. 5. Those changes included: reducing and simplifying discovery efforts to make room for the commercial build on our income statement. creation of a supply chain that could accommodate thousands of delivery points. developing processes to make decisions regarding investing in pipeline building activities versus investing in creating revenue and revenue growth. This is a big mistake. This is a challenge because both internal and external constituencies are wholly invested in the product. Act Three. As a biopharmaceutical develops financial strength from a successful launch.

68 • . Today Genzyme has more than 10. We were the first nonJapanese biotechnology company to introduce therapeutic products without Japanese partners. Among the programs Genzyme sponsors is the Gaucher Initiative. Genzyme’s presence in China began in 1999 with treating patients through the Gaucher Initiative. In 1997. Genzyme’s commitment to patients motivates its global development By Henri Termeer Henri Termeer Genzyme From our founding in 1981 in a small office in Boston’s Chinatown neighborhood.000 employees around the world. We made it a priority to establish international roots because we felt a responsibility to bring therapies to patients who need them. we expanded our commercial efforts with the opening of offices in Shanghai and Beijing. regardless of where they live. We are currently in the midst of major expansion projects in the US. and research. becoming the country’s first major biotechnology company. We now employ 130 people there. Genzyme established an office in Brazil. we have invested in creating a global infrastructure that includes manufacturing. Genzyme donated $110 million worth of Cerezyme and other products around the world. Brazil now serves as a hub for all of our activities throughout Latin America. Henri Termeer is chairman. we will continue to cultivate our international roots to contribute to the global growth of the life sciences industry. and president of Genzyme. serving patients in nearly 90 countries. We’ve formed partnerships with local companies. and are rapidly expanding commercial operations globally. Approximately 125 Chinese patients are now being treated with Cerezyme. and recently announced plans to build a major research and development center in Beijing. we acquired manufacturing facilities in the UK. where there are tremendous numbers of patients who could benefit from the advances of biotechnology. In our first year. families. Recent anniversaries—20 years in Japan and 10 years in Brazil—offer examples of Genzyme’s remarkable international growth. France. regulatory affairs. In 2007. This network enables us to bring products to patients in even the most difficult-to-reach locations. This new site represents an important element of our long-term commitment and a major step forward in our effort to improve the lives of patients in China. where we have 150 employees. Genzyme established commercial operations in Japan. International product sales now account for more than half of our revenues. free of charge.Perspective From Chinatown to China. We are investing in emerging markets such as China and India. Ireland. and physicians throughout the world. In 1987. Genzyme has a strong presence in developing countries. By contributing through various humanitarian programs to improving global health. Belgium. where we provide free medicine and help create sustainable health care systems. chief executive officer. Genzyme has understood that a global presence is the best way to provide the highest standard of care to patients. As we expand our presence in China and throughout the world. a humanitarian program that brings Cerezyme to patients with Gaucher disease who live in countries where reimbursement is not yet a reality. In 2006. clinical development. Genzyme demonstrates its commitment to patients and creates goodwill with policymakers in both the developing and industrialized world. We also sell transplant and orthopedic products in China. Since then. and the Netherlands. the UK.

Figure 19. Global reach of Massachusetts Life Sciences Super Cluster Great Britain Vancouver Boston EU Turkey China UAE India Japan Mexico City Brazil Australia Global companies • 69 .

that meant focusing the company and prioritizing. for shareholders to buy into innovation. and could deliver a return to the shareholders.Interview Deborah Dunsire On coming to Massachusetts Moving into the Massachusetts super cluster was very striking. If they’re entrepreneurially inclined. we’re not going to have the knowledge workers that we need. Massachusetts has got a real brain trust. There is a very open and communicative relationship. I think more than 50 percent of their graduating classes are international students. cutting costs. So. There is a high level of entrepreneurialism here and a crucible for innovation to move into commercialization. You are always better off being disciplined. On the need for strengthening education One of the things I feel very passionate about is the state of American education. As a result. rather than expanding in every direction. the industrial expertise. Once we achieved balance between revenue and spending. From a business perspective. And that allows for the creation of companies to move ideas and scientific advances forward into potential products. Entrepreneurs sometimes see so many applications for a new technology—especially a platform technology—that they start heading off in lots of directions. particularly if we’re going to have restrictive visa issues that make it hard for them to work here. they can go back to their countries and generate incredible wealth for themselves. you have to show them discipline and focus. with good schools. its huge disadvantage is that it is incredibly expensive. say. Massachusetts is a state where we’ve seen the governor truly reach out and be open to understanding the industry here better and understanding how valuable biotechnology can be as an engine of growth for the state. they either lose focus or they don’t devote sufficient resources to those new areas. I’m very. On cooperation with the state government The biotech community and the state have been doing an increasingly good job of talking with a common voice about why it is vital that we work together on these issues and how that might work. So. 70 • . keeping those folks here is harder. On innovating within a public company Millennium is a company that can truly innovate. that may become an issue. MIT right now. On the impact of Massachusetts’ high cost of living Every dollar that goes to incremental payrolls because you have to bring workers into an incredibly expensive area or an area with higher taxes is a dollar that doesn’t go to driving innovation or to value creation. For Millennium. And that preparation must start early in life. and the financing that creates a unique ecosystem here. On advice for entrepreneurs It’s very easy to underestimate how much experience and expertise are required to enter new therapeutic areas. But. and that’s a critical success factor for this biotechnology super cluster to thrive and grow. both from the scientific and research communities. So. limiting our therapeutic areas. having come from the big pharma corridor in New Jersey. we began to regain their support for innovation. and redirecting resources to our commercializing our marketed products and driving the top-priority products in the development pipeline. And then. the clinical side. very passionate about education. You’ve got to be able to build what you want to invest in into a model in which shareholders feel they’re getting an adequate return on their investment. running more focused and leaner longer. which has a long cycle for delivering revenue dollars. Massachusetts’ huge advantage is a constellation of factors. When we look at. We need to prepare our young people so they can compete for entry into these elite institutions and then be available to us as employees down the line.

Deborah Dunsire has served as president and CEO of Millennium Pharmaceuticals since 2005. a pharmaceutical company. Dr. Dunsire led the North American Oncology Operations of Novartis. and served on the boards of the Pharmaceutical Research and Manufacturers of America (PhRMA) and is a current board member of the Biotechnology Industry Organization (BIO). She is widely recognized as an industry leader. Global companies • 71 . Previously. and formerly held various positions with Sandoz.

knowledge. and entrepreneurship. Looking forward into the next 30 years.Looking forward The Massachusetts life sciences super cluster is paving the way toward global health care markets. . Since the super cluster’s inception in the early 1980s. Massachusetts has strengthened local connections between companies and institutions. there are rich opportunities to establish global relationships to complement Massachusetts’ skills. developing the basis for a sustainable research and economic powerhouse. which are likely to generate a bright economic future for the Commonwealth.

the Boston Museum of Science’s efforts to build a science and technology center to motivate the next generation of life sciences innovators. Local leaders also need to create programs that encourage more minority students to embrace life sciences. In an effort to fill SEIT graduate classrooms. As of 2006. This is essential to guarantee that the entire population benefits from the super cluster’s development into a global hub for healthcare and life sciences. In the next 10 years. The Commonwealth needs more students to fill future positions. 42 percent of all master’s and doctoral degrees granted in the On the work force A majority of survey respondents believe job opportunities in the super cluster will strengthen throughout the next decade. Massachusetts will provide them access to some of the most promising jobs in the American economy. and innovation. All stakeholders in the Massachusetts life sciences industry must endeavor to build the highly skilled work force that will allow these organizations to continue to thrive. engineering. weaken. Industry and academic leaders and government policymakers must collaborate to address these challenges so the Commonwealth preserves its preeminent position in life sciences research. The nation also outpaced Massachusetts in master’s and doctoral degrees in SEIT fields. and companies. But exposure is only part of the solution.This report highlights several threats to the super cluster’s future vitality. while Massachusetts colleges showed a meager 2 percent rise. greatly enhance minority participation. This results in a decreasing share of advanced SEIT degree awards granted by Massachusetts colleges to local students who would likely remain in the Commonwealth after graduation. an insufficient transportation infrastructure. special emphasis must be placed on math and life sciences curricula for students as they move from the first day of kindergarten to the last day of college. the Commonwealth has become increasingly dependent on admitting students from overseas who enroll under the temporary F-1 student visa program. for example. while introducing adults to the world of medical science. Certainly efforts such as the Biomedical Science Careers Program. During the last decade. and information technology (SEIT) fields by approximately 20 percent. When addressing the Commonwealth’s work force pipeline issue. This cross-generational initiative encourages young students to pursue careers in the life sciences industry and helps shape the opinion of adults who will influence their children’s career decisions. some life sciences positions suffer from 8 percent to 10 percent vacancy rates. as illustrated in Figure 20. Currently. gaps in science and math education. Another disturbing trend involves the relatively low number of college-educated undergraduate and graduate students Massachusetts colleges are producing. development. Educators also must address the problem of low math proficiency rates for minority students. Figure 20. an extremely high cost of living. which provides opportunities for young minority students to learn and become excited about the world of science. or stay the same? Strengthen Stay the same Weaken 9% 36% 55% Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Looking forward • 73 . and a less-than-hospitable regulatory and business environment. This confidence may stem from the governor’s billion-dollar initiative to invest in life sciences programs and projects over the coming decade. teaching hospitals. Historically. By introducing more minority students to opportunities in the life sciences industries. and improving their proficiency in math. do you think that job opportunities in the Massachusetts life sciences cluster will strengthen. the Commonwealth has focused on promoting growth at its research centers. the nation increased the number of bachelor’s degrees awarded in scientific. Consider. including reductions in federal funding.

as shown in Figure 21. A majority of life sciences startups license university technology. This combination of moral duty and economic return—known in the industry as the double bottom line—continually motivates people even when the odds appear against them. the Commonwealth will have to place greater focus on our ability to train the future life sciences work force. Massachusetts’ research institutions must make high-risk/ high-reward areas a primary mission. as illustrated in Figure 23. As a company grows. Boston Scientific. Do you consider yourself an entrepreneur? Yes No 34% 66% On entrepreneurs Entrepreneurs are the key to the Commonwealth’s life sciences innovation economy. a decade will pass before a product goes to market.SEIT fields in Massachusetts were awarded to students with temporary visas. To succeed. are you more likely to work for a large company. as it takes a diverse set of skills to take an invention from lab to market. The Commonwealth can point to the super cluster as proof of return on investment when it lobbies for increased federal funding. Educational programs have been established to help entrepreneurs become great team builders. as shown in Figure 22. or Haemonetics. to ultimately produce a product that will fulfill an unmet medical need. In a field where 75 percent of workers hold college degrees and 40 percent hold advanced degrees. Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Figure 22. it needs talented entrepreneurs at each transition point. In your next position. Two-thirds of survey respondents considered themselves entrepreneurs. An overwhelming majority of survey participants said they would prefer to work for a startup company. They know that. forcing many researchers to become more conservative at a time when many survey participants believe major project breakthroughs are near. In the life sciences. which means entrepreneurs should nurture strong relationships with technology transfer offices around the Commonwealth. endure years of complex product-development risks. or in academia? Start-up Large company Academia 8% 23% 69% Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey On financing The Commonwealth’s billion-dollar life sciences initiative represents a significant investment and victory for public support of life science funding. Federal funds have started to languish and NIH applications are receiving more scrutiny. Millennium. The Commonwealth is currently developing programs. and transition the business to a commercial enterprise. in many instances. and trends shaping the global impact of the Massachusetts life sciences industry . as the resulting inventions represent the seeds that entrepreneurs will plant to create the next Genzyme. perspectives. a startup. entrepreneurs have different expectations than business people in other industries. these entrepreneurs must convince skeptical early-stage investors. Super Cluster II Ideas. such as: • K-16 science and math exposure programs • Minority mentoring • Internship and cooperative education programs • MBA rotational programs Figure 21.

However. They wonder how they will obtain funding in a competitive environment. forming new relationships and alliances. slowing research. and producing less ambitious proposals as they try to secure funding. Looking forward • 75 .3% 20. Rank of Massachusetts venture capitalists on the following measures (Strongest to weakest) 1. and creates an aura of discouragement for both the current and future generations of life sciences pioneers. This flat line funding pattern hurts Massachusetts’ promising young investigators the hardest. vibrant. and opportunities for success Table 26. Approachability 6.1% On NIH funding Life sciences industry leaders in Massachusetts are alarmed by the lack of funding increases from NIH since 2003. During the next 10 years. setting more conservative goals. however. and market biomedical products on a global scale.5% Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey Life sciences venture capital financing in the Commonwealth was robust. Funding levels have remained flat despite rising inflation and higher business and research costs. active super cluster pays worldwide dividends. Massachusetts can do better. Willingness to collaborate 5. The NIH was asked for an 8 percent increase in funding in 2008. Consider the overseas examples of PAREXEL in clinical trials and Millipore in biomanufacturing.2% 10. business people. 26. or startup and early-stage venture capital funds.Figure 23. Even established scientists with attractive grant proposals find themselves caught in protracted grant review processes that may play out over years. Clearly. This slows down progress and threatens research that could save lives and prevent disease. Those requests were denied. Massachusetts’ future teems with opportunities. run clinical trials. One of the perspectives in this report outlined compelling reasons for expanding the number and scale of high-quality venture capital firms in the Commonwealth. As these young scientists. Yet no public or private policy exists to stimulate the growth of new funds. not months. and capital to build new transformational life science companies. International companies have targeted Massachusetts-based companies for mergers and acquisitions because they sought access to local talent and technology. only ranking second behind California. and money invested into building a healthy. Massachusetts will continue to be a rich source of educational opportunities for people around the world. The Commonwealth already has a community of intellectually and financially powerful investors who understand and appreciate the life sciences industry. institutions and companies have improved their ability to collaborate.e. life sciences investigators are downsizing their laboratories. Other regions have proven that more capital attracts more entrepreneurs and enhances the probability that innovations will reach the commercial market.4% 5. Connections 3. This struggle disheartens researchers. Business expertise 4. Stewards of the super cluster have an economic and moral responsibility to promote and advance the industry. effort. Life sciences expertise 2. in what area of product development do you see the Massachusetts super cluster excelling? Convergence of technologies (i. drug/ device combinations) Biologics Personalized medicine Nanomedicine Pharmaceuticals Medical devices Other 4. entrepreneurs. and a 9 percent increase in 2009. Willingness to fund radically new ideas Source: 2008 PricewaterhouseCoopers/Xconomy Massachusetts Life Sciences Super Cluster Survey On growing as a global hub As the super cluster has evolved during the past three decades. Because of these frustrations. they will further expand the super cluster’s network. The time. jobs.6% 19.9% 13. and entrepreneurs return to their home countries. a policy that promotes more early-stage funds would serve several purposes: • Stimulates new financial entrepreneurs to form their own companies • Increases the approachability of the VC community • Provides a competitive environment where more radical ideas receive funding • Creates solutions for the Valley of Death dilemma • Encourages deals. manufacture. These complementary life science linkages will strengthen the super cluster’s commercial abilities and stimulate the delivery of high quality services and products to patients around the globe. Both established and young companies in Massachusetts are discovering ways to take advantage of global resources. It stifles their careers. It is in Massachusetts’ best interest to align inventions.

ScD President New England Healthcare Institute Super Cluster II Ideas.Conclusions by NEHI and MTC We have reached a critical time in the growth of the life sciences industry in Massachusetts. our two organizations—the Massachusetts Technology Collaborative (MTC) and the New England Healthcare Institute (NEHI)—are committed to bringing together leaders from across the super cluster to work collaboratively to ensure a robust future for the life sciences in Massachusetts. Through these and other major collaborative initiatives. issues that are critical to maintaining our global leadership position in this crucial arena. the Massachusetts Life Sciences Collaborative. we will continue to nurture and grow our great scientific and commercial assets and maintain our prominent position as the global leader in life sciences. and trends shaping the global impact of the Massachusetts life sciences industry . other states and nations are investing heavily in their life sciences capacities and have the potential to chip away at our current competitive advantage. This report highlights many of the strategic priority areas that the Massachusetts Life Sciences Collaborative is addressing.000 people across the Commonwealth in sectors ranging from biopharmaceuticals and medical devices to health care delivery and health information technology. As other states. perspectives. We have much to be proud of: our economic super cluster employs over 400. yet at the same time we have many challenges ahead. The life sciences industry in Massachusetts generates over $25 billion in revenues and leads the nation in per capita NIH funding. This group of leaders. We have achieved great successes. and encouraging a peer review and strategic approach to life sciences public policy. Mitchell Adams Executive Director Massachusetts Technology Collaborative Wendy Everett. This coalition is charged with the mission to develop a cross-sector comprehensive life sciences strategy for the Commonwealth. improving science and mathematics education. However. leaders from across the life sciences were brought together to identify and address critical issues that are fundamental to securing the robust growth of the state’s super cluster. universities. and countries are increasing efforts to lure our best and brightest scientific minds (and even companies) away. The potential threat to this jewel in the Commonwealth’s crown is that we will become complacent in our success. we must intensify our efforts to preserve our well-earned reputation as a place where innovation and entrepreneurship thrive and where premier institutions of research and learning continuously feed our life sciences industries with new discoveries and creative. planning and developing a transportation infrastructure to enable fast and reliable service. and the number of life sciences PhDs. To confront these challenges within a global economy. and companies in the region. is led by a Leadership Council comprised of principals from the top hospitals. These priorities include addressing the impact of declining NIH funds. regions. creating favorable conditions for business growth. talented people. venture capital investment. fostering entrepreneurship and the growth of early-stage innovative companies. Sincerely. Governor Deval Patrick established a bold vision for the life sciences with the state’s $1 billion Life Sciences Initiative. To strengthen the future of our super cluster.

3% • MS and/or MBA: 31. which was then downloaded for formatting and analysis by PwC staff. Massachusetts Technology Collaborative. Participants’ data was captured by the website and loaded into a database.0% Respondents by highest level of education: • BA/BS: 33. and Massachusetts Medical Device Industry Council.2% • Research university: 14.6% • Medical device: 14. Massachusetts Biotechnology Council.3% • Post-doctoral fellows: 1.2% • MD: 2.3% • PhD: 29.1% • Female: 21.1% • JD: 2. with support from the New England Healthcare Institute.Methodology and sources Survey PricewaterhouseCoopers and Xconomy.5% • Medical instrumentation: 3. PricewaterhouseCoopers and Xconomy provided a secure and confidential web-enabled questionnaire.0% • Joint doctorate (MD/PhD or PhD/JD): 1% • High school: 1% • 77 . Respondents by gender: • Male: 78.1% Respondents by sector: • Biotechnology: 30.1% • Other (including trade associations): 26.4% • Student: 6. The survey. conducted in spring of 2008.3% • Professional academia: 9.9% Respondents by position: • Professional/commercial: 83. administered a survey for the 2008 Massachusetts Super Cluster II report.6% • Pharmaceutical: 11. targeted 580 life sciences organizations with 147 individuals responding.

Additional information Table 27. Parts Thereof. Life sciences patent codes 532-570: Organic compounds 800: 128: 378: 501: 601: 602: 604: 606: 607: 623: 530: 210: Multicellular living organisms and unmodified parts thereof and related processes Surgery (includes class 600) X-Ray or Gamma Ray Systems or Devices Compositions: Ceramic Surgery: Kinesitherapy Surgery: Splint. Life sciences NAICS codes Attributable to biomedical industry 100% 100% 100% 56% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 10% 100% 100% 10% 3% 6% 100% 100% 100% 100% 100% 100% 100% Overall industry Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Life sciences Healthcare Healthcare Healthcare Healthcare Healthcare Healthcare Healthcare NAICS 325411 325412 325414 541710 325413 334510 334516 334517 339111 339112 339113 339114 339115 339116 423450 423460 424200 541380 621511 621512 611310S 611310P 622P 524114 621P 622P 622L 622S 622F 623P Specific industry name Medicinals and botanicals Pharmaceutical preparations Biological products exc.. and Electrical Application Prosthesis (i. Brace. perspectives. Lignins or Reaction Products Thereof Liquid Purification or Separation Super Cluster II Ideas. Peptides or Proteins. diagnostic R&D in the Physical. or Aids and Accessories Thereof Chemistry: Natural Resins or Derivatives. Artificial Body Members). or Bandage Surgery (Medicators and Receptors) Surgery (instruments) Surgery: Light. Engineering and Life Sciences In vitro and in vivo diagnostic substances Electromedical apparatus Analytical instruments X-ray apparatus and tubes Laboratory apparatus and furniture Surgical and medical instruments Surgical appliances and supplies Dental equipment and supplies manufacturing Ophthalmic goods manufacturing Dental laboratories Wholesale trade—Medical and hospital equipment Wholesale trade—Ophthalmic goods Wholesale trade—Druggists’ goods Testing Laboratories Medical laboratories Diagnostic imaging centers Colleges and Universities—State Colleges and Universities—Private Hospitals—Private Health Insurance Carriers Ambulatory healthcare services Hospitals—Private Hospitals—Local Hospitals—State Hospitals—Federal Nursing Homes and Residential Care Facilities Sector Pharmaceuticals Pharmaceuticals Pharmaceuticals Biological Research and Development Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Medical Devices and Equipment Wholesale trade Wholesale trade Wholesale trade Medical and Testing Laboratories Medical and Testing Laboratories Medical and Testing Laboratories Academic Research Academic Research Academic Research Health Insurance Carriers Ambulatory healthcare services Hospitals Hospitals Hospitals Hospitals Nursing homes Table 28.e. Thermal. and trends shaping the global impact of the Massachusetts life sciences industry .

University of Massachusetts Chairpersons emeriti George S. Treasurer • 79 . Fleming Group Senior Vice President. Vertex Pharmaceuticals Patricia M. Holahan Deputy Executive Director and General Counsel. MTC. Vice President of Engineering (retired). LP Alain J. William R. Senior Vice President. Nakazawa President. Massachusetts Executive Office for Administration and Finance Penni McLean-Conner Vice President. Boston University. Chobanian President Emeritus. MTC. Secretary Christopher B.Massachusetts Technology Collaborative board of directors Executive committee Karl Weiss Board Chairperson. National Grid USA Gregory P. Raytheon Aram V. Alpha Industries Jeffrey Kalb Technology Advisor. Harvard University. Harvard University Board members Martin Aikens Business Agent. NSTAR Philip W. Professor Emeritus. Customer Care. John T. Jeffrey Grogan Partner. Kirwan Secretary. Navigator Technology Ventures Kerry Murphy Healey Fellow. Commonwealth of Massachusetts David D. University of Massachusetts Lowell Jack Wilson President. Atomic Ordered Materials. Preston President and CEO. LLC Edward Simon Vice President of Technology (retired). Dean Emeritus. Martin John H. The Monitor Group. Van Vleck. NSTAR Paul W. Professor of Pure and Applied Physics. Christian and Timbers C. Institute of Politics. Inc. Bialecki Undersecretary for Business Development. Norman Former President. Lecturer in Architecture. Nakazawa Consultants. Thurston CEO (retired). Cognition Corporation Priscilla Douglas Vice President of Learning and Development. Boston University School of Medicine Michael J. Cheney Visiting Professor. Local 103 Patrick Carney Manager of Field Training. Unitrode Corp. Massachusetts Board of Higher Education Krishna Vedula Professor of Engineering. Flynn Trustee Professor of Economics and Management. Kariotis Chairman Emeritus (retired). Massachusetts Bay Community College Patricia Plummer Chancellor. Graduate School of Design Lindsay D. Reilly Board Vice-Chairperson. California Micro Devices Corp. International Brotherhood of Electrical Workers. Northeastern University. GenRad. Hanover Managing Director and CEO. Northeastern University Lawrence J. General Counsel and Secretary. Andrews Chief Financial and Administrative Officer. Officers of the corporation Mitchell L. Bentley College Debra Germaine Partner. Adams Executive Director Philip F. Cronin President and CEO. Harvard Kennedy School of Government The Honorable Leslie A. Genzyme Corporation Paul C.

MGH Center for Regenerative Medicine Alan E. Marshall K. Inc. Inc. Harvard Medical School. Department of Stem Cell and Regenerative Biology. Daley. Harvard University.. Clarus Ventures David T. Massachusetts General Hospital. perspectives. Smith. Boston University George Q. Scadden. Lodish. and trends shaping the global impact of the Massachusetts life sciences industry . PhD Associate Professor of Biological Chemistry and Molecular Pharmacology and of Pediatrics. Associate Physician Members James Barry PhD. Whitehead Institute for Biomedical Research.Massachusetts Life Sciences Center board of directors Board of directors Daniel O’Connell Secretary of the Executive Office of Housing and Economic Development Jack Wilson. Jay Gonzalez Undersecretary of Administration and Finance Micheline M. Professor of Biology and Professor of Bioengineering. PhD Chief Scientific Officer. Amherst College David M. Department of Biochemistry. Jeffrey Leiden. Genzyme Corp. Bartlett Professor of Surgery. M. Phillip Zamore. Harvard Medical School Lila Gierasch Professor of Biophysical Chemistry. Beer former President and Chief Executive Officer. University of Massachusetts Marc D. Harvard Stem Cell Institute. Boston Scientific Corporation James J. PhD President. Donahoe. MD Director of the Pediatric Surgical Research Laboratories and Chief Emerita of Pediatric Surgical Services. Children’s Hospital Boston. Co-Chair. MD Harvard Medical School. Cytonome. Mathews-Roth. Massachusetts Institute of Technology Super Cluster II Ideas. Lydia Villa-Komaroff. PhD Founder and former Chairman of the Board. Professor of Biomedical Engineering. Harvard University. PhD Chief Executive Officer. PhD John Woodruff Simpson Lecturer and Professor of Biology. Professor of Medicine Brigham and Women’s Hospital. PhD Managing Director. Inc. Co-Director. MD. Abiomed. PhD Member.D. PhD Professor. Senior Vice President. Director. Lederman. University of Massachusetts Amherst Richard A. Biochemistry and Molecular Pharmacology. Harvard Stem Cell Institute Patricia K. Collins PhD. Corporate Technology Development. ViaCell. UMass Medical School Scientific advisory board Chair Harvey F. MD Professor of Medicine. Goldsby.

Torchiana. MD Senior Vice President. Tufts University Paul Lammers.New England Healthcare Institute board of directors Chair Joseph B. MD Executive Vice President for Health Affairs Dean. MD Lecturer in Medicine Harvard Medical School Harris Berman. MD President & CEO Partners HealthCare System Thomas J. PhD Chairman. PhD President & CEO Cystic Fibrosis Foundation Edward J. Inc. PhD (Clerk) Chairman & CEO Vertex Pharmaceuticals. Global Health Economics and Outcomes Research Amgen Sandra Oliver Vice President. Public Policy Wyeth Pharmaceuticals John Fallon. Vice President of Federal & State Government Affairs AstraZeneca Pharmaceuticals LP Peter Deckers. MD Dean Public Health and Professional Degree Programs Tufts University School of Medicine Nick Littlefield Partner Foley Hoag. MD Chairman and CEO Massachusetts General Physicians Organization Partners HealthCare System Josef H.. MD Interim Chancellor University of Massachusetts Medical School • 81 . Charles Hewett. von Rickenbach Chairman of the Board and CEO PAREXEL International. PhD Lefler Professor of Neurobiology Harvard Medical School Chester Davis. Andrew Purcell Vice President. MD. Inc John Littlechild (Treasurer) General Partner Healthcare Ventures. LLP Joshua Boger. PhD Director Tufts Center for the Study of Drug Development. Jr. Inc. Beall. Ryan. Rusckowski CEO Philips Medical Systems Una S. Dickinson and Company) Don Gudaitis CEO American Cancer Society New England Division Razia Hashmi. Strategic Business Development Novo Nordisk James Roosevelt. LLP Beverly Lorell. President & CEO Millipore Corporation John T. Worldwide Policy Pfizer David F. Human Resources EMC Corporation James Mongan. Public Policy & State Government Affairs Bayer HealthCare LLC Richard Pops Chair Alkermes. MD Senior Medical and Policy Advisor FDA/Healthcare Practice Group King & Spalding. MD President Dana-Farber Cancer Institute Michael F. Inc Eve Slater. Martin. School of Medicine University of Connecticut Health Center Marijn Dekkers President & CEO Thermo Fisher Scientific Matthew D. Gentile Vice President & General Manager BD Discovery Labware BD (Becton. PhD President & CEO AVANT Immunotherapeutics. Chair emeritus Henri Termeer Chairman & CEO Genzyme Corporation Vice chairs Burt Adelman. Benz. Moore. LLC Board members Robert J. Martin Madaus. MD Chief Medical Officer EMD Serono. Eyles Vice President. Jr. PhD Vice President & COO The Jackson Laboratory Vaughn Kailian General Partner MPM Capital Kenneth Kaitin. Inc. Jr. MD Chief Physician Executive Blue Cross Blue Shield of Massachusetts Jonathan Fleming Managing Partner Oxford Bioscience Partners Joseph S. Inc. Collins. President & CEO Tufts Health Plan Steve H. MD Medical Director WellPoint. Mollen Senior Vice President. MD Associate Provost Boston University Medical Center Joshua Ofman. MD VP of Reimbursement and Payment Policy.

and medicines that benefit people worldwide. and other initiatives designed to better connect people and Valerie Fleishman New England Healthcare Institute 617-225-0857 vfleishman@nehi. is committed to advancing the development of critical new science.m. Dan von Lossnitzer PricewaterhouseCoopers LLP Tamara Conant. development. Alviani Alviani & Associates Economic analysis Andrew Porter Health Policy Economics PricewaterhouseCoopers LLP Jack Melissa Walsh Massachusetts Life Sciences Center 617-834-4945 mwalsh@masslifesciences. MassMEDIC provides services. Jennifer Horn. close-to-the-scene information about the local personalities. and manufacturing capital of the world. The Hindy Shaman.Report authors Timothy P. and technological trends that best exemplify today’s high-tech economy. Massachusetts Biotechnology Council The Massachusetts Biotechnology Council provides services and support for the Massachusetts biotechnology industry. Xconomy Xconomy is dedicated to providing business and technology leaders with timely. insightful. PhD Health Policy Economics PricewaterhouseCoopers LLP Report advisory team Mitchell Adams Massachusetts Technology Collaborative James Connolly PricewaterhouseCoopers LLP Bryan Costantino PricewaterhouseCoopers LLP Michael Costello PricewaterhouseCoopers LLP Wendy Everett. Massachusetts Medical Device Industry The Massachusetts Medical Device Industry Council is the voluntary grassroots association of medical device manufacturers and associated companies in the Commonwealth. Lin Johnson MIT Sloan School of Management students Joseph D. perspectives. companies. PhD PricewaterhouseCoopers LLP Glen Comiso Massachusetts Technology Collaborative Valerie Fleishman New England Healthcare Institute Nicole Stephenson PricewaterhouseCoopers LLP Greta Tinay Massachusetts Technology Collaborative Melissa Walsh Massachusetts Life Sciences Center Contact information James Connolly PricewaterhouseCoopers LLP 617-530-6213 james. Ann K. Glen Comiso Massachusetts Technology Collaborative 617-973-8673 comiso@masstech. Coleman. It delivers this valuable content through a unique global network of localized blogs. technology. Jason Gagnon. and trends shaping the global impact of the Massachusetts life sciences industry . ScD New England Healthcare Institute Attila Karacsony PricewaterhouseCoopers LLP Gerald McDougall PricewaterhouseCoopers LLP Mike Masterson Super Cluster II Ideas. Sandy Lutz. programs. Edwards. Its goal is to become the authoritative voice on the exponential economy. Peter Russell. the realm of business and innovation characterized by exponential technological growth and responsible for an increasing share of productivity and overall economic growth. Juliet Duffy. events. and collaborative initiatives with the goal of making Massachusetts the medical device research. representing over 500 Writer David Simanoff PricewaterhouseCoopers LLP Research analysts Christopher Kuschel PricewaterhouseCoopers LLP Alyson Simonetta PricewaterhouseCoopers LLP Acknowledgments We would also like to thank the following groups and individuals for their support and insight into the creation of this report.connolly@us.

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