Biotechnology Industry Snapshot 2011

MA BioPharma Employment Growth Continues

The industry weathered the 2009 downturn without a drop in employment. In fact, we grew jobs at a projected 3.9% rate in 2010.
60,000 46,380 46,826 43,187 40,000 31,914 32,571 30,000 38,243 37,643 39,185 44,642 48,657

50,000

20,000

10,000

52.5% Growth since 2001

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source: U.S. Census, County Business Patterns and MassBio formula and analysis. *2010 figure is a final estimate based on review of Massachusetts ES-202 data for 2010.

Annual Growth/Decline Rates: 2001-2010

The industry rebounded from just 1% growth in 2009 to 3.9% growth in employment in 2010.
20%

15%

10%

5%

0%

-5% Grow th/Loss

2001 8.9%

2002 2.3%

2003 17.3%

2004 -1.6%

2005 4.1%

2006 10.3%

2007 3.4%

2008 3.7%

2009 1.0%

2010 3.9%

Source: U.S. Census, County Business Patterns and MassBio formula and analysis. *2010 figures are final estimates based on review of Massachusetts ES-202 data for 2010.

BioPharma Industry Impact in MA

The estimated average salary in the biopharma industry is 77% higher than the estimated state average salary of $53,834. While the industrys exports arent completely captured under Pharmaceutical Products, this category alone accounts for over 8% of all Massachusetts exports.

$4,615,364,513 in payroll (2010) $95,628 in average salary (2010)

Massachusetts Exports, 2010 All Commodities Optic, Photo Etc, Medic Or Surgical Instrments Etc Industrial Machinery, Including Computers Electric Machinery Etc; Sound Equip; Tv Equip; Pts Pharmaceutical Products

26,256,370,201 5,324,511,940 4,601,715,086 4,518,662,880 2,136,306,456

20.20%

8.10%

Source: U.S. Census, County Business Patterns, MassBio estimate using 2009 base data, MassExport Center.

Biotechnology R&D Employment

According to the Bureau of Labor Statistics Quarterly Census of Employment & Wage (QCEW) data, Massachusetts leads the nation in biotechnology research & development employment.

CA CT MA MD MI MO NJ NY NC PA WA

2007 19,134 2,452 24,565 10,154 4,670 4,262 8,567 2,679 7,042 15,902 2,499

2010 21,616 1,582 26,807 9,469 2,759 3,874 9,224 3,553 6,275 12,776 3,730

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)

Biotech R&D Employment, 2007-2010

Massachusetts grew biotechnology research employment between 20072010. We were outpaced only by California.
-1911

WA
-3126

1231

PA
-767

NC NY NJ
-388 657 874

MO MI

-685

MD MA CA
2242

2482

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)

Biotechnology Research Concentration

Massachusetts holds a dominant position in terms of industry concentration in Biotechnology Research and Development almost twice the concentration of jobs as the next closest state. The Massachusetts concentration did, however, decline slightly from 2009.
8

What is a Location Quotient?

Location Quotients measure the concentration and strength of an industry in a region versus the nation as a whole. Location Quotients of more that 1.0 mean that the industry enjoys a greater concentration in a region versus the nation as a whole.

5
2007

2009
2010

0 CA MD MA MO NJ NC PA WA

C A M D M A M O N J N C P A W A

2007 1.22 4 .1 7.32 1.56 2.15 1.75 2.71 0.87

20 09 1.34 3.77 7.58 1.55 2.20 1.68 2.19 0.90

2010 1 .39 3 .74 7 .42 1.4 2 .29 1 .57 2 .09 1 .27

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)

Biotech R&D Employment: U.S. Counties

Among leading U.S. counties in biotech R&D employment, Middlesex County in Massachusett s continues to stand out.
18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 0

te r, M W ak A e, N M C er ce M r, id dl N J es ex So ,N m J er se t, D ur N J ha m ,N C he C st er St .L ,P A ou is , Es MO se Sa x, M A n Sa t a C n la M ra at eo Su , C A M on ffol k tg om , M A M o n e ry ,M tg om D er Sa y, n P Di eg A M o, id CA dl es ex ,M A
Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)

W or

ce s

Biotech R&D Employment: U.S. Counties

Number of Biotech Research Employees

This graphic combines the factors of biotech research employment by county with the corresponding industry concentration (location quotient) in each county noted on the previous page.

20,000

Middlesex, MA
17,500

15,000

12,500

San Diego, CA
10,000

Montgomery, PA

7,500

Suffolk, MA
5,000

Montgomery, MD

2,500

10

12

14

16

18

20

22

Concentration of Biotech Employment (Location Quotient)

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)

A Pause in BioPharma Manufacturing Growth

Only Massachusetts, Maryland, and North Carolina have grown biopharma manufacturing jobs since 2006. However, Massachusetts shed manufacturing positions in 2010 along with all of the other states, except Maryland. This trend is confirmed by other data sources as well.

CA CT IL IN MA MD NJ NY NC PA

2006 44,047 9,404 19,084 19,255 7,944 5,536 40,379 21,720 19,409 22,299

2007 43,971 8,825 18,654 19,525 9,139 6,220 42,256 21,731 19,224 22,107

2008 43,035 7,926 18,534 18,822 9,581 6,097 37,957 20,971 18,787 22,294

2009 43,386 7,410 18,077 17,950 9,706 6,379 33,933 20,495 20,345 21,743

2010 43,162 7,225 18,032 17,141 9,514 6,574 32,794 20,070 20,119 21,352

Source: U.S. Bureau of Labor Statistics, Quarterly Census of Employment and Wages (QCEW)

Venture Capital Investment

In 2010, Massachusetts companies received $850 million in VC biotech financing. In the first quarter of 2011, MA companies received $104 million in VC financing, the lowest quarter since 2004. In Q2, MA companies received $371 million, an alltime quarterly high.
Biotech Venture Capital: Investment in MA Companies, 2001-2010
$1,000,000,000 $900,000,000 $800,000,000 $700,000,000 $600,000,000 $500,000,000 $400,000,000 $300,000,000 $200,000,000 $100,000,000 $0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Source Data: 2010 PricewaterhouseCoopers, National Venture Capital Association, MoneyTreeTM Report, Historical Trend Data, MedTrack, and MassBio analysis.

MA Share of the Biotech VC Dollar

In 2010, Massachusetts companies received 23.1% of all U.S. VC biotech investment an all-time high. The percentage of investments at the start-up and seed stage was at a higher percentage in 2010 than in 2002 or 2006.
25 20.8 20 15.9 19.5 16.9 23.1

Percentage invested at Start-up/Seed Stage

2002

5.4%

P e rc e n t a g e

15 12.0 10

2006

4.8%

0 2000 2002 2004 2006 2008 2010

2010

21.9%

Source: 2010 PricewaterhouseCoopers, National Venture Capital Association, MoneyTreeTM Report, Historical Trend Data, MassBio analysis.

Drug Development Pipeline August 2011

Massachusettsheadquartered companies* account for about 10% of the U.S. drug development pipeline and 5% of the global pipeline.
Candidate medicines of Massachusetts-headquartered* companies, by clinical trials stage
Pre-Clinical Phase I Phase II Phase III Pending Approval 316 216 275 76 14

Massachusetts-headquartered companies share of U.S. and Global drug development pipeline

Total Trials 9.41% 4.91% PC 11.00% 5.88% I 11.99% 6.43% II 8.26% 4.56% III 8.46% 3.52% PA 3.89% 1.44%

% of US % of Global

* There are many drugs in development in Massachusetts by companies with headquarters located outside of Massachusetts. These candidate drugs are not included in any Massachusetts pipeline estimates found in this report.
Source: MedTrack Online, Life Sciences Analytics, Inc.

Massachusetts Pipeline by Therapeutic Area

Of the 897 drugs in the Massachusetts pipeline, 42.7% are cancer drugs. Drugs intended for the Central Nervous System (CNS) therapeutic area are next at 10.1% of the pipeline.
Cancer Central Nervous System Infectious Autoimmune and Inflammation Metabolic/Endocrinology Ophthalmology and Optometry Respiratory and Pulmonary System Blood and Lymphatic System Cardiovascular & Circulatory Musculo-Skeletal-Disorders Digestive Dermotology Kidney & Genito-Urinary
Genetic Diseases & Dysmorphic Syndromes

Substance Abuse W omen's Health Miscellaneous

Total Trials Companies 383 59 91 35 84 30 61 33 47 23 32 13 32 20 30 16 25 36 24 11 19 15 18 15 13 10 11 6 10 5 9 6 8 7

Source: MedTrack Online, Life Sciences Analytics, Inc.

Miscellaneous Women's Health

7 8 6 9 5 10 6 11 10 13 15 18 15 19 11 24 36 25 16 30

Massachusetts Pipeline by Therapeutic Area

Substance Abuse Genetic Diseases & Dy smorphic Sy ndromes Kidney & Genito-Urinary Dermotology Digestiv e Musculo-Skeletal-Disorders Cardiov ascular & Circulatory Blood and Ly mphatic Sy stem Respiratory and Pulmonary Sy stem Ophthalmology and Optometry Metabolic/Endocrinology Autoimmune and Inflammation Infectious Central Nerv ous Sy stem Cancer
Total Trials
# companies

20 32 13 23 33 30 35 59 0 50 100 150 200 250 300 350 32 47 61 84 91 383 400 450

Source: MedTrack Online, Life Sciences Analytics, Inc.

Massachusetts Drug Pipeline Movement: May 2010-April 2011

Between May 2010 and April 2011, 217 candidate drugs advanced in the development pipeline from entering into preclinical trials through advancing to approval by the FDA. 43 drug candidates were acquired by out-of-state companies and 59 candidate trials were terminated or the proposed drug met with nonapproval.
Preclinical Studies Phase I Phase II Phase III Pending Approval Approvals

79

57
46
20
27
PC candidates acquired by by out-of-state acquisition

12
3

16 clinical candidates
acquired by out-of-state acquisition

16
Discontinued PC studies

40 terminated trials

3
Non-approvals

Source: MedTrack Online, Life Sciences Analytics, Inc.

NIH basic research funding increased slightly to $21.8 billion nationwide. Excluding the federal stimulus funding of 2009, NIH funding has remained stagnant since 2003.
On a NIH-funding per capita basis, Massachusetts far exceeded other leading NIHrecipient states. Massachusetts is home to the Top 5 NIH-funded research hospitals in the U.S.

National Institutes of Health Funding, 2010

CALIFORNIA MASSACHUSETTS NEW YORK PENNSYLVANIA TEXAS MARYLAND NORTH CAROLINA WASHINGTON ILLINOIS OHIO $3,332,378,004 $2,447,323,040 $2,001,047,954 $1,405,917,085 $1,078,078,997 $1,018,825,272 $931,973,222 $846,526,930 $732,681,496 $662,354,991

$374

$176

$158
$139

$103

$98

$89
$56
$57
$57

CA

MA

NY

PA

TX

MD

NC

WA

IL

OH

Sources: National Institutes of Health, U.S. Census Bureau.

Leading BioPharma Employers in MA

A look at the leading biopharma employers in Massachusetts illustrates the power of the life sciences supercluster.
1. Genzyme (Sanofi) 2. Pfizer 3. Biogen Idec 4. Novartis 5. Thermo Fisher Scientific 6. Shire 7. Vertex 8. EMD Millipore 9. Parexel International 10. Millennium: Takeda Oncology 11. Charles River Laboratories 12. AstraZeneca 13. EMD Serono 14. Hologic 15. Abbott Laboratories 16. Sunovion Pharmaceuticals (DSP) 17. Nova Biomedical 18. Cubist 19. Lantheus 19. Merck 20. Bristol-Myers Squibb 4,356 2,600 2,300 2,100 1,700 1,500 1,310 1,237 1,200 1,050 970 900 850 800 750 690 631 626 550 330 320

Sources: MassBio, membership reports, survey, Boston Business Journal Book of Lists, 2011.

What is in a number?
How do we get to the 48,647 employment number? MassBio relies on data from two sources. For the years 2001-2009, MassBio derives its industry numbers from the County Business Patterns data of the U.S. Census Bureau. County Business Patterns basic data items are extracted from the Business Register, a file of all known single and multi-establishment employer companies maintained and updated by the U.S. Census Bureau. Data for single-establishment companies are obtained from various Census Bureau programs, such as the Annual Survey of Manufactures and Current Business Surveys, as well as from administrative record sources. Because there is a 1.5 year time lag in the provision of CBP data, for the year 2010 as in past years, MassBio used a formula to estimate the growth or decline rate in industry employment based on data from the states ES-202 data. MassBio then applied this growth rate to the 2009 aggregate industry employment number generated from County Business Patterns (CBP) data. MassBio has used this formula in recent years with a high degree of accuracy. Our 2009 projection, for example, was only 106 jobs in variance from the final actual number revised for 2009.

What is in a number?
What is considered biopharma employment? Using the North American Industry Classification System (NAICS), by which both the CBP and ES-202 data is reported, MassBio has determined that several NAICS classifications can be considered part of the biotechnology and pharmaceutical industry. However, only in certain cases can the industry claim 100% of any one NAICS code. Therefore, MassBio determined that a percentage of some industry classifications could be used in estimating overall industry employment. In some cases, the percentage determination for certain industry codes was based on reports developed by other organizations. The following NAICS codes are utilized:
NAICS 3254: Pharmaceutical MFG (100%) NAICS 541711: Research &Dvelopment in Biotechnology (100%) NAICS 541712: R&D in the physical, engineering, and life sciences (except biotech) (33%) NAICS 334516: Analytical Lab Instrument MFG (30%) NAICS 54138: Testing Laboratories (30%) NAICS 4242: Drug merchant wholesalers (10%) NAICS 622: Hospitals 622 (4.5%) NAICS 61131: Universities (1.9%) and the minumum reported figures in statistical ranges for 4 "green biotech" classifications: 325199, 325221, 311222,311223.

Questions?
As the premier source of information on biotechnology in Massachusetts, MassBio tracks industry statistics over time and issues an overview report each year. For more information, contact:
Peter Abair, Director of Economic Development & Global Affairs 617-674-5100 Peter.abair@massbio.org