presentation

MassBiotech 2010Janice T. Bourque

President & CEO

Massachusetts Biotechnology Council

BioStrategy Seminar Series Thursday, September 18, 2003

The Massachusetts Biotechnology Council is a non-profit industry association for Massachusetts biotechnology.

The MBC advances common goals of the Massachusetts biotechnology industry by:

• Providing joint activities and services• Influencing legislative and regulatory policies• Strengthening industry community & collaborations• Building public support for biotechnology

Massachusetts Biotechnology Council

Source: Ernst & Young, Beyond Borders: The Global Biotechnology Report 2002;Feinstein Kean Healthcare.

National Biotechnology Industry

• United States– 1,457 biotechnology companies (342 are public)

– Employing 191,000 people

– $28.5 billion revenue in 2001

– Life Sciences accounts 13% of GDP, by 2013 expected to be 22%

– $3.7 billion invested in biotech in 2002

Source: Massachusetts Technology Collaborative, 2002 Index of the Massachusetts Innovation Economy, 2003, MassBiotech 2010 report, MBC, 2002.

MA Biotechnology Industry• Massachusetts

– Over 280 biotech (53 public) companies employing approximately 30,000 individuals.

– $835 million in life sciences-related venture capital investments in 2001

– Over 122 colleges and universities

– The Massachusetts Biotechnology Council (MBC) is the oldest and second largest biotechnology association in the world.

– Biotech accounted for half of the new industrial jobs created in Massachusetts during the past six years.

– Biotech accounted for 27% of $8.5 billion spent by Massachusetts public companies on R&D, 15% of venture capital funds raised, and 18% of the patents filed.

– Massachusetts has 8% of the world’s clinical pipeline.

– The state receives highest NIH dollars per capita.

– $572.8 million invested in biotech in 2002.

• The Massachusetts Biotechnology Council (MBC), with the assistance of The Boston Consulting Group (BCG), conducted a study of the Massachusetts biotechnology industry and the broader life-sciences economic cluster.

• Report available - www.massbiotech2010.com

MassBiotech 2010 Report

Life Sciences Cluster Composed of Diverse & Interconnected Segments

HEALTH CAREHospitalsProviders

PayersHMOs

Public health organizations

Patients

PUBLIC INSTITUTIONSState officialsLocal officialsQuasi-publics

Public agenciesCommunity-based

organizations

EDUCATIONUniversities

Community collegesK-12 schools

OTHER SERVICESLaw firms

Real estateIT firms

AccountantsConstruction

Medical devices

BIOTECHHuman therapeuticsAgricultural biotech

Marine biotechEnvironmental biotech

PharmaceuticalsDiagnosticsBiodevices

SPECIALIZEDSUPPLIERS

Lab/ bio supplies & equip.Platform & tools companies

Contract manufacturingBioinformatics

CROs

BASIC RESEARCHAcademic research labs

Academic medical centers

FUNDING ENTITIESGovernment grants

Venture capital firmsFinancial institutions

Competitive Advantage MA Companies Cite Universities & Talent as Primary Sources

Source: MBC, BCG Biotech 2010 project interviews

2 2112

35

8

11

11

14

19

21

0

10

20

30

40

50

60

70

80

90

100

Proximity to major universities

Availability of scientists

Strength of partner industries

Proximity to other biotech companies

Quality of life

Availability of skilled technicians

Availability of spouse jobs

Leg./ reg. environment

Cost of laborOther

Personal

Quality supplier base

Average allocation of 100 points across potential sources of MA advantage

“We started here because our founders come from Massachusetts universities. We stay here because the best people

are here.”

“We started here because our founders come from Massachusetts universities. We stay here because the best people

are here.”

Weather

Geographic Distribution of MA Biotech Employment in 2001

Worcester

Woods Hole

BeverlyDanvers

Wilmington

West Bridgewater

Wareham

Fall River

Devens

Boxborough

Billerica

Agawam

Ashland

Bedford

Boston

BrightonCambridge

Canton

Charlestown

Framingham

Franklin

Hopkinton

Lexington

Marlborough

Maynard Medford

Milford

Natick

Needham

NewtonNorthborough

Norwood

Rockland

Waltham

Watertown

Wellesley

Westborough

Woburn

Number of employees

1,000

500

100

Andover

Source: Massachusetts Biotechnology Council, BCG Value Science Center

280

215

149

185

240

88

0

50

100

150

200

250

300

1991 1994 1996 1998 2000 2002

Year

Number of Companies

Growth by Number of Companies

+69%

+16%

+12%

+16%

+24%

Source : Massachusetts Biotechnology Council

Biotech Companies in MA

Biotech Employment in MA

30,000

7,682

23,596

15,572

12,171

16,872

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

1991 1994 1996 1998 2000 2002

Year

Number of Employees

Growth by Number of Employees

+58%

+8%

+40%

+27%

+28%

Source : Massachusetts Biotechnology Council

MA Biotech Employment Outpacing Total Industrial Job Growth

18

30

0

5

10

15

20

25

30

'96 '97 '98 '99 '00 '01

667 691

0

100

200

300

400

500

600

700

800

'96 '97 '98 '99 '00 '01

(K) (K)

Massachusetts Industrial Jobs

Massachusetts Biotechnology Jobs

1% per year

1% per year 10%

per year10%

per year

Source : Massachusetts Division of Employment and Training

Biotech is a Growth Engine for MA

(1) Base SIC 2833-36, 3826, 8731 adjusted for individual companiesSource: PWC Money Tree Survey; BCG Value Science Center; United States Patent and Trademark Office classes 424, 435,

514, 532-570, 800

280

600

0

100

200

300

400

500

600

700

'96 '97 '98 '99 '00 '01

Venture-capital funds raised by Massachusetts biotechnology companies

16% per year

16% per year

840

2,300

0

500

1,000

1,500

2,000

2,500

'96 '97 '98 '99 '00 '01

R&D spending by Massachusetts biotechnology companies(1)

22% per year

22% per year

328

681

0

100

200

300

400

500

600

700

800

'96 '97 '98 '99 '00 '01

Biotechnology patents granted to Massachusetts

companies and universities

16% per year

16% per year

($M) (K)(K)

MA Companies Own Over 8% of Global Clinical Development Pipeline

State

Note: State attribution based on headquarters location of product’s primary owner (1) Pipeline includes large and small molecule drugs, diagnostic tests and biodevices

Source: Biospace Clinical Competitive Intelligence Systems (CCIS) database, September 2002

Number ofproducts in pipeline

470

201 196145

218

0%

5%

10%

15%

20%

CA MA NJ NY PA05010015020025030035040045050017.5%

8.1%7.5% 7.3%

5.4%

Number of FDA-Approved MA Biotech Products Expected to More Than Double by 2005

Expected growth of FDA-approved Massachusetts Biotechnology products

2002 2005 2010

~40

~90

~130

Development phaseDevelopment phase

Phase IPhase IIPhase IIIApproval pending

Current number Current number of productsof products

63734823

Probability of Probability of successsuccess(1)(1)

21%31%59%91%

Time to Time to marketmarket(1)(1)

~6 years~5 years~3 years~1 year

Expected outputExpected output

13 compounds by 200823 compounds by 200728 compounds by 200521 compounds by 2003

(1) Based on average figures for new chemical entities (NCEs); BCG analysis; Tufts Center for the Study of Drug DevelopmentSource: Biospace CCIS database; “A Revolution in R&D,” BCG, November, 2001; BCG analysis

MA Biotech In-State Capabilities

(1) Clinical development structure in state(2) Commercial manufacturing onlyNote: Sample is 134 human therapeutics companies Source: Massachusetts Biotechnology Council Survey 2002, BCG analysis

CommercialResearch Development(1) Manufacturing(2)

108

57

8

9

10

7

2611

153

232

24

MAcompanies

Out-of-state companieswith MA locations

Activity in Massachusetts

Activity in outside Massachusetts

0

2

4

6

8

10

12

14

16

18

20

1991 1996 2001 2005 2010

Opportunity to Create Nearly 100K Jobs

Note: 2001 baseline: 30K biotech jobs and ~70K indirect jobs= ~100K total jobs Source: Bio E&Y 2000 Report; MBC 2002 survey; BCG Analysis; Economic Model

MA share of U.S. biotech jobs 1991-2010

MA share of biotech jobs (%)

Lose ground• MA share erosion

continues

Increase share• MA strengthens

its #2 position

Unleash potential• MA closes gap

with CA

11

22

33

~150K new jobs

~90K new jobs

~20K new jobs

Industry Challenges & Opportunities

• Big Pharma moving to the state

• Keeping more pilot plant manufacturing in state

• State marketing campaign– Massachusetts It’s All Here

• Political engagement

• Increased interactions with Washington– NIH

– CDC

– FDA

– Department of Defense

MBC Initiatives• Economic Development

– “Team” Massachusetts approach– Physical A&E– Permitting & Zoning– Site Identification– Community Outreach & Networking

• Education – Science standards– Teacher training– High school lab equipment

• Workforce Training– Project Management– Clinical Trials for Doctors– Biotech 101

MBC Initiatives• Technology Transfer

– Improving process

– Addressing conflicts of interest

• Clinical Trials– Expansion of # and type of clinical trials in MA

• Policy/Public Affairs– Stems cells

– Permitting

– Tax policy

– Price controls

– Restrictive access to therapies

• Communications– Public understanding of biotech

MassBiotech 2010Janice T. Bourque

President & CEO

Massachusetts Biotechnology Council

BioStrategy Seminar Series Thursday, September 18, 2003