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Derek Lowe The 2002 Model

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Derek Lowe, an Arkansan by birth, got his BA from Hendrix College and his PhD in organic chemistry from Duke before spending time in Germany on a Humboldt Fellowship on his post-doc. He's worked for several major pharmaceutical companies since 1989 on drug discovery projects against schizophrenia, Alzheimer's, diabetes, osteoporosis and other diseases. To contact Derek email him directly: Twitter: Dereklowe

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August 6, 2012

Biotech Clusters

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Posted by Derek

How important is it to have a "anchor" company in a regional bio/pharma cluster? How do you get a thriving cluster of biotech companies, anyway? There are a lot of cities that would like the answers to these questions, not that anyone has them (although there are consultants who will be glad to convince you otherwise).

Luke Timmerman has thoughts on the subject here, pointing out that some of the more well-known biotech hubs have been losing some of their marquee names to takeovers and the like. This has to have an effect, and the question is just how big (or bad) it'll be.

Other companies, in some places, might be able to step up and fill the void, but not always. If there isn't a robust culture in an area (or not yet), then taking out the main company that's driving things might bring the whole process to a halt. If, in fact, it is a process - and that takes us back to the whole question of how these clusters get started in the first place. The biggest and most impressive share some common features (well--known research universities in the area, to pick the most obvious), but what seem to be very similar features in other locations can fail to produce similar results.

Many are the cities that have tried to grow their own Silicon Valleys and Boston/Cambridges. Overall, I'm skeptical of attempts to purposefully induce these sorts of things, and that goes both for R&D clusters as well as the various city-planning attempts to bring in young creative-class types. At best, these seem to me to be likely to missing some key variables, and at worst, it's reminiscent of South Pacific cargo cults. ("If we make this look like a happening city, then that's what it'll be!") It's not that I don't think more research hot spots would be a bad thing, of course - just the opposite. It's just that I don't know how you achieve that result.

Comments (17) + TrackBacks (0) | Category: Who Discovers and Why


1. petros on August 6, 2012 11:27 AM writes...

In the UK the only major biotech cluster is the one that has evolved centred upon Cambridge, and this has evolved rather than being planned.

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2. simpl on August 6, 2012 11:30 AM writes...

Here is one linked to the Serono closure, who claims it might help - maybe they are putting a good face on things, though

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3. BHip on August 6, 2012 12:12 PM writes...

Human nature being what it is, there is a lot of "me too" in the process. It's amusing/sad to watch companies scurry to what is the current destination flavor of the month- Research Triangle!! No, wait, San Diego!!! Oh crap, the Boston area, we have to be in the Boston area!! Now, we won't make stupid mistakes!! Now we understand drug discovery!!.....

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4. davesnyd on August 6, 2012 12:29 PM writes...

I don't know about the need for one marquis anchor company. When I visit San Diego and talk to people about their career histories, I'm amazed at how easily new startups can be formed and thrive there.

It's a combination of a real estate market that is lab savvy, availability of used equipment, and experienced people who can be chosen as members of new companies.

Yes, that implies creative destruction-- layoffs from some companies, folding of others-- that provides the used equipment and available workers. But isn't that what capitalism is about?

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5. Anonymous on August 6, 2012 12:46 PM writes...

Petros #1, what about the Stevenage Science Park? According to the SBC blurb,, this one is doing quite well but it's hard to get any independent verification.

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6. petros on August 6, 2012 1:02 PM writes...

Stevenage Science Park is a few buildings that have been built by GSK opposite their large research site. It's finished and I believe there are one or two start ups in there but it's nothing like a biotech cluster

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7. John Wayne on August 6, 2012 1:05 PM writes...

I have the same sort of skepticism as Derek when it comes to planned 'clusters' of any sort of companies. There are a lot of nice aspects of having a lot of pharma and biotech in the Cambridge area, but only one of those things matters: jobs.

We live in a Brave New World wherein chemists (and others) will not spend their careers at a single company. We can argue if that is good or bad, but at the end of the day we don't have to move, get new license plates for our cars or move the kids to another school. That is the advantage of Cambridge, and I hope the relatively happy and engaged employees will keep the companies here.

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8. MolecularGeek on August 6, 2012 1:16 PM writes...

I'm with davesnyd. It isn't necessarily that there is one marquee biotech in the area, that's often a side effect of a good research environment. What I think is essential is a couple of research-intensive enterprises (commercial or non-commercial) that need some biomedical research types. It's all about maintaining an ecosystem of available talent. If I wanted to start a biotech in St. George, Utah or Lima, Ohio, growth would be a real problem, because you have to convince people to move there, and risk having to move back out again when the venture fails, as more than half will. You have to have the churn, and there has to be at least one perceived stable employer who is seen as the fall-back position. Often this may be the marquee biotech, but it is often an academic medical center or university, or even a more traditional big pharma (although they are less likely to be seen as such nowadays). I don't think that there's a lot that cities who don't have the "buzz" can easily to do draw new startups, as long as people are reasonably concerned about what happens when any given position goes east.

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9. MTK on August 6, 2012 2:19 PM writes...

I would agree somewhat with what most others have commented regarding an "anchor company". It's a want, but not an absolute need in order to have a biotech/technology cluster.

What you really need are two things: talent and capital willing to invest in that talent.

The talent is obviously why so many clusters are centered near powerhouse academic research centers. The available capital, or lack of it, is also why so many regions with the talent are unable to retain or develop that talent. Without the money the talent will gravitate to those areas with it.

That means private and public money. Some areas just don't have the stomach for that type of high risk investment.

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10. Anonymous on August 6, 2012 2:26 PM writes...

I remember when a firm I was working with did an analysis of where to put their "center of biotechnology" in the 1990's. Mostly an accounting-driven (and political power-driven) process than real strategy.

While I suggested going where the talent was coming from (e.g., Boston) or where top-talent would want to live, the decision was made to invest the firm's future into Syracuse, NY. This at least reduced their costs of refrigeration, but that "anchor" failed to grow a "hub" of any note.

More than a decade later, they have done a "rethink" more along the lines of my 1995 recommendations and much of the above discussions.

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11. Anonymous on August 6, 2012 4:18 PM writes...

I've never understood the proximity argument. There are some pretty good universities outside of Cambridge I hear. Plus the wages biotech companies want to pay people now means the cost of living in these so called hubs is a major problem.

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12. Devices runs on August 6, 2012 6:34 PM writes...

I think a lot of the development of a cluster is not only where the universities are but that startups often get started by folks from the original big company in town (look at all the device startups in Minneapolis) and the folk doing the startup often are more senior with nice houses and kids in school and don't want to move

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13. channeljockey on August 6, 2012 9:18 PM writes...

I remember an article written in Nature years ago that explored this very issue. Biotech centers cannot be willed into existence, any more than arts clusters can. They just happen, but why? Why are Chicago and Toronto not biotech hubs? They have money, talent and space. Maybe they're missing a certain "joie d'invest" entrepreneurial biotech drive that might be required to activate a new cluster that San Diego, Boston and San Francisco have in spades. I don't know.

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14. Nick K on August 7, 2012 2:28 AM writes...

Sometimes, a pioneer company can create a hub without a nearby university. The Maybridge company did just this with Bude and surroundings in Cornwall. Over the years, several small and not so small companies working in contract chemistry and and catalogue chemistry set up down there (Tripos, Key Organics etc), attracted by the Local Development Agency grants and the availability of chemists. Unfortunately, hubs can also fade, and this now seems to be happening with the closure of Tripos amongst others and the running-down of Maybridge by ThermoFisher.

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15. Zorkbirder on August 7, 2012 8:52 AM writes...

On a positive note(?) despite or perhaps because of the decline of big Pharma in NJ, NJ biotech has seen a 9.3% increase in jobs over the last two years.

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16. Dr. Manhattan on August 7, 2012 4:25 PM writes...

"Oh crap, the Boston area, we have to be in the Boston area!! Now, we won't make stupid mistakes!! Now we understand drug discovery!!....." Said Pfizer Senior Management.

As if that is some mystical panacea to their problems. They just don't get it.

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17. Morten G on August 9, 2012 4:24 AM writes...

Copenhagen is pretty good for the anchor. Novo is doing really well and because it's foundation owned they can't move out.
Good scientists, good amount of start-ups (at least compared to population size).
I think they are lacking investment money and probably more flexibility in scavenging from dead companies. And it's an expensive place to live (but the same can be said for SF and Boston).

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