April 2015 Meeting. Agenda 2 I.Introduction of New Members II.Preview of BIO 2015 in Philadelphia III.BioPharma Manufacturing in Massachusetts: Sites,

Economic Development Advisory Group

April2015Meeting

Agenda

2

  I. Introduction of New Members

II. Preview of BIO 2015 in Philadelphia

III. BioPharma Manufacturing in Massachusetts: Sites, Workforce, Tax Policy, Costs, Opportunities

IV. Review of MassBio Commuter Survey – Discussion on Action Steps

V. Update and Discussion on Baker Administration & LSI’s Future

I. New member Introduction

3

Tony KotarskiExecutive, PropertiesGE Healthcare Life Sciences

Tamara McGrillenManager, Operations, Investor and Public RelationsRxi Pharmaceuticals

Brian FrenchPartnerNixon Peabody

II. Preview of BIO 2015 in Philadelphia

4

Elizabeth Steele Director, EventsMassBio

III. BioManufacturing in Massachusetts

Mapping Findings

6

1. The region has the greatest capacity of mammalian cell culture manufacturing capacity in the world,

2. The area’s workforce development assets are strong (and can meet current biopharma workforce needs) and getting stronger,

3. Massachusetts tax code and incentives provide competitive advantages to biopharma manufacturers,

4. Massachusetts has BioReady® manufacturing sites of sufficient size to accommodate large biopharma manufacturing facilities, but these are limited in number,

5. While labor costs in the 495 belt and beyond are competitive with other regions, energy costs are higher than many competitor locations,

6. Federal corporate tax rates present an obstacle when the competition for siting a facility is global in nature,

7. Considering the size of the biopharma R&D cluster in Massachusetts, local CMO options are limited.

With over 600,000 liters of mammalian cell culture manufacturing capacity in the region*, the region has the most expertise in biologics manufacturing in the world.

*Including two factories in RI and NH

Source: Analysis by Elisabeth Reynolds, MIT Industrial Performance Center, Data from Bioprocess Technology Consultants.

The region has the greatest capacity of mammalian cell culture manufacturing capacity in the world

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4 1. Lonza - Portsmouth 105,000 liters

2. Bristol-Myers Squibb Devens, 120,000 liters

3. Amgen – W. Greenwich 180,000 liters

4. Pfizer - Andover

5. Shire – Lexington 8,000 liters

6. AbbVie – Worcester 40,000 liters

7. Genzyme - Framingham

8

8. Baxter - Milford

10. Sanofi Pasteur Biologics - Canton

2

1

9. MassBiologics –Boston & Fall River

109

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Regional BioPharma MFG (40 or more employees)

Company Town State EmployeesAbbVie Bioresearch Center Worcester MA 700ALEXION MANUFACTURING Smithfield RI 145AMGEN W Greenwich RI 1050AMGEN Woburn MA 90AMRI Burlington Burlington MA 75ANIKA THERAPEUTICS INC Bedford MA 60Baxter Healthcare Milford MA 80BIOGEN Cambridge MA 3100Blue Sky Bioservices Worcester MA 41Bristol-Myers Squibb Devens MA 650CELLDEX THERAPEUTICS INC Fall River MA 53Chemic Laboratories, Inc. Canton MA 43GENZYME - Allston Landing Boston MA 260Genzyme, A Sanofi Company Framingham MA 2900Johnson Matthey Devens MA 48MassBiologics Boston/Fall River MA 200MICROTEST (Accuratus) Agawam MA 100NITTO DENKO Avecia Milford MA 110ORGANOGENESIS INC Canton MA 385PCI Newburyport MA 85Sanofi Pasteur  Canton MA 138SHIRE Pharmaceuticals Lexington MA 1500SHIRE HUMAN GENETIC THERAPIES (HGT) Cambridge (Alewife) MA 160LONZA Portsmouth NH 600

The area’s workforce development assets are strong (and can meet current biopharma workforce needs) and getting stronger

10Source: UMass, NCES. IPEDS Completions Survey. Accessed via NSF webcaspar.

Degrees/Certificates Granted at Mass Public and Private Institutions

Massachusetts

2001-2013Total

Degrees

Ass

ocia

te's

Bac

helo

r's

Mas

ter's

Doc

tora

te-P

rofe

ssio

nal

Pra

ctic

e

Doc

tora

te-

Res

earc

h/S

chol

arsh

ip

Total Certif icates Below the Baccalaure

ate

Aw

ard

of le

ss th

an 1

ac

adem

ic y

ear

Aw

ard

of a

t lea

st 1

but

le

ss th

an 2

aca

dem

ic

yrs

Aw

ard

of a

t lea

st 2

but

le

ss th

an 4

aca

dem

ic

yrs

Total Certif icates Above

the Baccalaur

eate

Pos

t-ba

ccal

aure

ate

Total 22,829 22,365 719 13,734 3,775 1,950 2,187 410 376 22 12 54 54

14.0501Bioengineering and Biomedical 1,214 1,214 10 721 270 213 0 0

14.0701Chemical Engineering 1,224 1,221 828 211 182 0 3 3

15.0599Environmental Control 74 54 35 19 17 17 3 3

15.0613Manufacturing Engineering 73 24 24 49 49 0

15.0799Quality Control and Safety 4 4 4 0 0

26.0101Biology/Biological Sciences, General 6,189 6,166 147 5,563 257 199 0 23 23

26.1201 Biotechnology 516 465 128 124 211 2 49 43 6 2 2

Grand Total

Degrees/

Certificates

Degrees Certif icates Below BaccalaureateCertif icates Above

Baccalaureate

UMass increase in Life Sciences grads

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UMass grads with life/health sciences degrees increased from

1,620 in 2007 to 2,760 in 2013

Life sciences research expenditures increased from

$247M in 2008 to $329M in 2013

Massachusetts BioPharm MFG Employment

Source: Bureau of Labor Statistics, QCEW (2014)

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

7,794

8,294

8,822

6,977

7,7777,944

9,139

9,581 9,7069,500

8,6548,960

9,322

9,980

MASSBIO DRAFT – NOT FOR DISTRIBUTION

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76

5

4

98

2

1

AA. UMass Lowell BioManufacturing Center

BB. WPI Biomanufacturing Education & Training Center

C

C. MassBiologics Vector Manufacturing Center

D. UMass Dartmouth BioEngineering

D

E

E. MIT Center for BioMedical Innovation BioMan

F

F. URI Biotechnology Ctr.

Sample Higher Ed

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10

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Quincy College (Quincy) – Uses two Xcellerex single use bioreactors in its program.  90% placement rate of graduates.  Relationships with Shire, Takeda, Ironwood. Roxbury CC (Boston) – Its program includes internship requirement in biomanufacturing as part of degree requirements.  Relationships with Vertex and Boston University. Middlesex CC (Bedford & Lowell) – Graduates 35 annually with near 100% placement.  Longstanding relationships with Genzyme, Lantheus, Shire, Novartis, Biogen Idec, Immunogen. Extensive 60 organization internship placement network. Mount Wachusett CC – Degree program now has articulation agreement in place with Fitchburg and Worcester State Universities.  Strong program developed to directly assist BMS at Devens, serves broad array of organizations in the region. Quinsigamond CC (Worcester) – Strong relationship with AbbVie, 13 organizations host biomanufacturing/R&D program students.  Degree and certificate programs. Springfield Tech CC – 168 student, 3 year enrollment in degree and certificate programs in biotechnology.  Relationships with MicroTest Labs, Genzyme and UMass-Amherst. Bunker Hill CC (Charlestown)– Relationships with Shire, Cubist, and Acceleron. 15 host organizations of student interns. 209 students in 3 years in degree & certificate programs.

Sample Highlights

MASSBIO DRAFT – NOT FOR DISTRIBUTION

3

Grafton7

65

4

8

2

1

A

B

C D

El

nk

j i

g

h

m

o

p

F

g. Northern Essex CC

h. North Shore CC

i. Middlesex CC

j. Mt. Wachusett CC

k. Quinsigamond CC

l. Roxbury CC

m. Bunker Hill CC

n. Quincy College

o. Bristol CC

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p. CC of Rhode Island

Training Assets

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MLSC Investments in Advanced and Bio-Manufacturing

• MassMEDIC statewide series of training sessions on advanced manufacturing in life sciences $100k

• MassBiologics Vector Manufacturing Center at SouthCoast Life Science Park $25.6M

• Massachusetts Biomanufacturing Roundtable $150k

• Clean room training facility at Holyoke Community College $3.8M

• Town of Framingham to facilitate Genzyme biomanufacturing plant construction $12.9M

• Biomanufacturing Education & Training Center (BETC) at Worcester Polytechnic Institute $5.15M (Building Construction & Equipment)

Massachusetts tax code and incentives provide competitive advantages to biopharma manufacturers,

• Flat corporate income tax• Single Sales Tax Factor• TIF packages from municipalities, property tax

exemptions on increased property valuation• Manufacturers exempt from personal property tax• MLSC tax incentive programs, refundable tax credits for

job creation• EDIP Tax Benefits (potentially in combination with MLSC

programs) • MLSC capital grants/MassWorks grants for public

infrastructure in support of manufacturing facilities

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Massachusetts has BioReady® manufacturing sites of sufficient size to accommodate large biopharma manufacturing facilities, but these are limited in number,

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Are large acreage sites still required in an era of disposable manufacturing technologies and supposed smaller footprints?

If so, Massachusetts currently has limited large acreage, Bioready® sites. However, further research could yield not sites.

(See spreadsheet)

Needed – Volunteers to research additional sites on spreadsheet.

While labor costs in the 495 belt and beyond are competitive with other regions, energy costs are higher than many competitor locations,

Federal corporate tax rates present an obstacle when the competition for siting a facility is global in nature,

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Source: Tax Foundation

Considering the size of the biopharma R&D cluster in Massachusetts, local CMO options are limited.

• Massachusetts headquartered companies have over 1,450 investigational drug products in development.

• It has only a handful of CMOs that manufacture clinical or commercial products.

• See Super Cluster report on biopharma MFG

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http://www.massbio.org/writable/editor_files/bs-14-0117_super_cluster_report.final2.pdf

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Company Town State EmployeesAbbVie Bioresearch Center Worcester MA 700ALEXION MANUFACTURING Smithfield RI 145AMGEN W Greenwich RI 1050AMGEN Woburn MA 90AMRI Burlington Burlington MA 75ANIKA THERAPEUTICS INC Bedford MA 60Baxter Healthcare Milford MA 80BIOGEN Cambridge MA 3100Blue Sky Bioservices Worcester MA 41Bristol-Myers Squibb Devens MA 650CELLDEX THERAPEUTICS INC Fall River MA 53Chemic Laboratories, Inc. Canton MA 43GENZYME - Allston Landing Boston MA 260Genzyme, A Sanofi Company Framingham MA 2900Johnson Matthey Devens MA 48MassBiologics Boston/Fall River MA 200MICROTEST (Accuratus) Agawam MA 100NITTO DENKO Avecia Milford MA 110ORGANOGENESIS INC Canton MA 385PCI Newburyport MA 85Sanofi Pasteur  Canton MA 138SHIRE Pharmaceuticals Lexington MA 1500SHIRE HUMAN GENETIC THERAPIES (HGT) Cambridge (Alewife) MA 160LONZA Portsmouth NH 600

Upcoming

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Making the Connection: Biomanufacturing & Supporting Resources in MassachusettsFriday, June 5 20158:00 am – 10:00 am

The perspective on biomanufacturing from Governor Baker’s administration

Jay Ash, Secretary of Housing & Economic Development, Commonwealth of Massachusetts

Needs?:

Expand the BioReady® Land Sites list

Provide perspective on CMO opportunity

Preliminary AnalysisMassBio Commuter Survey - 2015

I. Review of MassBio Commuter Survey – Discussion on Action Steps

Survey Essentials

• 293 participants

• Respondents lived in 99 different communities in Massachusetts, New Hampshire and Rhode Island

• Respondents commuted to 15 municipalities

Position Profile of Respondents

Research & Development 49.3% 144Manufacturing 3.4% 10Other Business Operations 49.0% 143

Research & Devel-opment

Manufacturing Other Business Opera-tions

0.0%

10.0%

20.0%

30.0%

40.0%

50.0%

60.0%

What is your job role?

Primary Means of Commuting

Response Percent

Response Count

3.8% 132.0% 638.3% 1209.5% 3121.7% 6923.6% 751.1% 40.0% 0

5290

3skipped question

I drive to work

I take a shuttle van or bus provided by my employer

Answer Options

I use the MBTA subway or trolley

answered question

I bicycle

I take a shuttle van or bus

Thinking of your typical daily commute, which best describes your PRIMARY means of commuting to work?

I take a bus

Other (please specify)

I walk

I use Commuter Rail

54.8% of respondents used public transportation (rail, subway, bus) as a primary means of commuting versus 38.3% who drove

Duration of Commute

Under 15 minutes

Under 30 minutes

Under 60 minutes

60-90 minutes Over 90 minutes

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

Thinking of your typical commute in normal conditions, how long does it take you to get

to work, door to door?

3.7%15.0%38.2%34.7%8.5%

60-90 minutes

Under 15 minutes

Under 60 minutes

Over 90 minutes

Under 30 minutes

43.2% of respondents have one-way commutes of 60 or more minutes

Commute Satisfaction

My commute is good, no real issues

My commute could be shorter, but the length of my com-mute does not af-

fect my satisfaction with my current job

Because of the length of my com-mute, I would con-sider a job closer to

my home

Commuting around here is such a prob-lem, I'm ready to

leave the region en-tirely

0.0%5.0%

10.0%15.0%20.0%25.0%30.0%35.0%40.0%45.0%

Which best describes your perspective on your current commute?

103% reporting connotes limited multiple responses occurred.

36% of respondents said they’d consider another employer for a better commute12% said they are ready to exit the region because of commuting issues

15 minute or less

15- 30 Minutes 30-60 minutes 60-90 minutes Over 90 minutes

90%

42%

3%

10%

37%

67%

26% 25%

16%24%

57% 60%

5% 5%

17% 15%

Commuting is so bad, I want to move out of the regionWould consider a job with a shorter commuteCommute could be shorter, but doesn't affect job satisfactionMy commute is Good

Commuting to Cambridge*

The 60- minute commute is the demarcation between job satisfaction and those who would consider a job closer to home. While 29% of those with 30-60 minute commutes to Cambridge would consider jobs closer to home or leave the area, 74% of those with 60-90 minutes commutes would do so.

*185 of survey respondents commuted to Cambridge

Commuting Satisfaction by Region

I495 and beyond 128 Belt Cambridge/Boston

28.6%20.7%

13.9%

14.3%34.5%

40.1%

42.9%

34.5% 34.1%

14.3% 10.3% 11.9%

Commuting is so bad I want to move oit of the region

Would consider a job with a shorter commute

Commute could be shorter, but doesn't affect job satisfication

My Commute is Good

Satisfaction by Destination Region

Satisfaction with commute is similar considering region of destination. Commuters to the 128 Belt and the Cambridge-Boston core report very similar degrees of satisfaction. Those commuting to the 495 belt had the greatest percentage reporting a “Good commute” and reported the greatest degree of dissatisfaction as well.

Cambridge/Boston: Closer Look

Commuting to Cambridge/Boston

Commuting within Cambridge/Boston

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

14.8% 13.6%

55.6%

35.9%

20.4%

37.9%

9.3% 12.6%

Commuting is so bad I want to move oit of the region

Would consider a job with a shorter commute

Commute could be shorter, but doesn't affect job satisfication

My Commute is Good

Interestingly, those commuting to Cambridge/Boston were decidedly more satisfied with their commute than those commuting within Cambridge/Boston.

Satisfaction by Primary Means of Commuting

Good CommuteCould be shorter, but satisfied

Would consider job with shorter 

commuteReady to leave 

regionBus 22.6% 45.2% 22.6% 9.7%

67.7% 32.3%Subway/Trolley 16.2% 47.1% 22.1% 14.7%

63.2% 36.8%Drive 12.9% 33.6% 41.4% 12.1%

46.6% 53.4%Commuter Rail 4.1% 25.5% 59.2% 11.2%

29.6% 70.4%

Those using bus or the T subway or trolley as primary means of commuting are substantially more satisfied with their commutes than those who drive or use commuter rail.

Weather Impact

My commute time did not change

Added 15 minutes to my commute

Added 30 minutes to my commute

Added 45 minutes or more to my commute

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

35.0%

40.0%

45.0%

In the period between January 27 and February 27, how much time, on average, was added to your

one-way commute?Weather-related issues increased one-way commuting times by 30 minutes or more for 80% of commuters

Employer Flexibility

97.2 % of respondents reported that their employer was accommodating in regard to work schedules and/or showed concern for safety and cautioned against travel in poor conditions, during the January 27-February 27 period.

Business Coalition Statement

Make the T a customer-focused organization that provides first-rate service and clear

communication

Provide greater accountability and transparency for the T’s governance and management

Develop a long-term strategic and capital plan for the T that efficiently uses its resources to enhance the current capabilities and future needs of the T, businesses and workers, while providing sufficient funding to cover the costs.

Overhaul the T’s procurement and maintenance practices so that the system is safe, reliable and in a state of good repair.

Establish metrics, milestones and regular reporting to ensure proper implementation of the T reforms within a reasonable period of time.

Ensure that the T balances its operating budget without the need for ever increasing state assistance each year.

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V. Update and Discussion on Baker Administration & LSI’s Future

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Next Meeting

• Friday, September 4th

Interim Meetings on:

BioReady Sites?

BioManufacturing initiatitives?

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