Maine’s biotech potential bright National rankings show fair progress

AUGUSTA – A comprehensive report on the future of the biopharmaceutical industry has state economic development officials pleased and trying to figure out how to bolster a business sector that has some of the best-paid jobs in America.

“Biopharmaceuticals are part of the whole biotech area,” said Economic and Community Development Commissioner Jack Cashman. “We have been doing work in this area, and while we have made some progress, we have a lot more we need to do.”

Cashman is pleased with Maine’s rankings in a national study of the potential of the biopharmaceutical industry by the California-based Milken Institute released last month. The 217-page report ranks every state for both its industry today and for its potential, and Maine’s overall rank of 27th was good news to Cashman.

“Given that we were dead last in R&D investments eight or 10 years ago, I am pleased we are in the middle in this study,” he said. “This is encouraging to me.”

The researchers in the biopharmaceutical area have developed medicines for treating everything from diabetes to cancer. The broader biotech area includes pharmaceuticals as well as genetic engineering of crops and improved processes for food to prevent spoilage.

Cashman said the state has moved to increase its investment in the whole area of biotechnology in the past few years and needs to do more.

“Over the last year we have formed the Marine Bio-tech Coalition to bring together some of the world-class research facilities we have in Maine,” he said.

The coalition includes the Bigelow Lab and the Gulf of Maine Research Center, he said, and will be expanded.

University of Maine Business School Dean Dan Innis said investment in research facilities is crucial to expanding Maine’s economy.

But, he said, a crucial “next step” must be transferring research results into manufacturing jobs.

“That’s where the real benefit to the economy comes in,” he said, “when you take that product or process and make something that you can sell, that is when there is a big payoff.”

He also said that is difficult to accomplish. He said all of the biotech fields are research-intensive, and not all research yields a drug or product that can recoup that investment.

In a key measure of venture capital investments, Maine is doing well. While Ohio led the nation in 2001-03 in the relative growth of total biotech venture capital invested, Maine was No. 2. Maine also scored well for risk capital investments, at 10th in the nation.

Another positive indicator for Maine was the Human Capital and Workforce Composite index that measures the capacity of the state to provide the researchers and support staff needed to expand. Maine was 17th in the nation, second only to Massachusetts in New England.

One measure where the state did poorly was in attracting research funds from the National Institutes of Health, a key source of federal research dollars. Maine ranked last in the nation.

“As we speak,” Cashman said, “Janet Yancey-Wrona [director of the Department of Economic and Community Development Office of Innovation] is in Washington at NIH. We know we have to do better, and we will.”

But a Brookings Institution study concluded earlier this year that while the area has huge potential, there are also risks. Only about 100 biotech-related drugs reached the market in the past 30 years, according to the Brookings report. There are about 400 more drugs in development, but approval by the federal Food and Drug Administration can take years. It can be a decade or more before a product gets FDA approval.

According to the Milken study, Maine’s biopharmaceutical-based research work force is small and consisted of about 1,400 workers in 2003. It concludes that the industry is “stagnant” in Maine even though there is great potential for the state.

“Biodesign International, a biopharmaceutical-based company, runs its manufacturing and research operations in Saco,” the report stated. “Biodesign is an industry leader in the supply of monoclonal and polyclonal antibodies, purified antigens, assay development reagents and custom antibody services to pharmaceutical, technology and diagnostic companies and life science researchers.”

The study said those 1,400 jobs in the biopharmaceutical sector generate another 2,600 jobs in the state. And the jobs in this sector pay well, most in excess of $50,000 a year.

“All these jobs in the biotech area are good jobs, “Cashman said, “and all the states are after them.”

In fact, several states have launched massive investment programs this year to lure parts of the biotech industry. Earlier this year Florida approved a $310 million state investment in a huge biotech research park. And in the past two years, New Mexico, Kentucky and Arkansas have established venture capital funds.

“We are investing in R&D here in Maine like the other states are investing in research,” Cashman said. “Everybody is looking to tap into this.”