A Boost For Bioscience
A growing life sciences industry is improving the health of Georgia’s economy and the health of people worldwide.
In August, Baxter International Inc. broke ground on a much-anticipated manufacturing facility east of Atlanta near Covington. The $1-billion facility, which will make plasma-based therapies that treat chronic and life-threatening illnesses, is expected to employ 1,500 when it begins operations in 2018 with potential for 300 more employees at plasma collection centers throughout the state.
“The Baxter plant represents a huge single investment in Georgia. It is really transformative for our state’s life sciences industry,” says Charles Craig, president of Georgia Bio, a nonprofit, membership-based organization that promotes the interests and growth of the life sciences industry. “Other companies are going to take a closer look at Georgia,” he says, “and when they do, they will quickly learn what Baxter discovered: They can be as successful here as any other place in the world.”
Georgia Bio members include bioscience companies, universities, medical centers and other business groups.
While the initial Baxter numbers are impressive, Craig and others say, they do not reveal the full scope of the plant’s impact on the state. The new facility could eventually lead to the creation – either directly or indirectly – of thousands of additional jobs in an economy where jobs, overall, are down. Furthermore, the Baxter plant is just one of a number of businesses in a sector that has served as a stabilizer for the state’s economy in recent years, providing new jobs, higher-than-average salaries and higher revenue collections for state and local governments, while other industries have struggled.
“Prior to the Great Recession, the life sciences sector was really a driver of the state economy, powering economic growth,” says Jeffrey M. Humphreys, director of the Selig Center for Economic Growth in the University of Georgia’s Terry College of Business and a Georgia Trend contributor. “Since the Great Recession, it has been more of a stabilizing influence. The industry hasn’t really grown very much, but [any growth] is good compared to many industries that have shrunk considerably.”
Basically, Humphreys says, the life sciences have seen small gains in jobs of around 1.5 percent from 2007 to 2010, while jobs in the state across the industry dropped about 7.9 percent. The number of life sciences businesses has increased by 4.4 percent during that timeframe, while the state lost 1.4 percent of establishments across all industries. Furthermore, salaries in the industry increased by 4.4 percent while salaries for all industries across the state dropped 4.2 percent, according to Shaping Infinity, a 2012 Georgia Life Sciences Industry Analysis produced by the University of Georgia’s Selig Center for Economic Growth and Georgia Bio.
The Baxter groundbreaking is a significant event, Craig says, and a validation of the fact that Georgia is a place where companies large and small can be successful.
Although growth during the last half-decade has been relatively slow, Humphreys expects that new data will show an upturn, particularly with the announcement of the Baxter plant and its construction set to begin in early 2013. “Life sciences … once again is ready to take the reins as a driver of the state economy,” he says.
Often used interchangeably, life sciences and bioscience refer to the industry that applies advances in biology to create vaccines, medicines and other products that improve the health and well-being of people, animals and the environment. An estimated 360 bioscience companies in Georgia are involved in products ranging from vaccines to protect against HIV infection to devices for monitoring damaged hearts.
The industry as a whole is relatively young – just over half of the currently active companies in Georgia have been in business more than 10 years; 11 percent have been active for fewer than three. Regardless, the products these companies are developing or producing are already having a positive impact worldwide, even as they play a vital role in the health of the state’s economy.
According to the Shaping Infinity report, there were 18,025 jobs in life science companies in Georgia in 2010 with a cumulative $16.7 billion in sales, $3.8 billion in earnings, and $417 million in tax revenues for state and local governments.
In addition, life science re-search at the state’s colleges and universities generated 14,282 jobs (on- and off-campus), $1.6 billion in output (sales), $700 million in earnings and $73 million in tax revenues for state and local governments. Moreover, the Atlanta-based Centers for Disease Control and Prevention – the state’s largest bioscience employer – generated 7,551 jobs, $1.7 billion in output, $1.1 billion in income and $66 million in tax revenues for state and local governments.
In total, the life sciences in-dustry directly provided 0.9 percent of all jobs in Georgia in 2010 and indirectly provided 2.5 percent of all jobs. In other words, one of every 40 Georgia employees can thank the life sciences industry, life sciences research and development, or the CDC’s presence in Atlanta for their jobs. And those working directly in the industry can also thank it for their higher-than-average salaries.
According to Shaping Infin-ity, the average salary of $64,473 in 2010 is 47 percent higher than the statewide average for all industries, which is $43,899. The highest paying subsectors were pharmaceutical and medicine manufacturing, with salaries averaging $94,363 per year, followed by electro-medical apparatus manufacturing at $91,803 per year and biotech research and development at $72,789 annually. The lowest- paying subsector was blood and organ banks – $44,477 annually, which is still slightly higher than the statewide average for all industries.
Higher salaries in one industry tend to translate to more jobs in others. Such is certainly to be the case when the Baxter plant begins production in six years, says Humphreys. The total economic impact will be about 7,900 jobs, and that, he says, represents an unusually high multiplier.
“Most industries have multipliers that are about one to one. In other words, for every job in the industry you may get another job somewhere else,” he explains. “But for the Baxter plant, there will be an additional 4.3 jobs that will exist as a result of spending related to the job.”
Although high salaries are a key reason for the high multiplier, the industry’s capital-intensive nature is also a factor, Humphreys says. “If you are capital-intensive, the number of jobs outside the plant are probably going to be a lot bigger than the number of jobs inside the plant – other industries are supporting your presence,” he says. “Over time it becomes tightly interwoven into the fabric of the community, and a lot of supplier relationships develop so you get more local multiplier effects than you do in other industries.”
“Baxter’s decision to locate its $1-billion biomanufacturing plant in Georgia is validation that our state has the business and research environment, along with the skilled workforce, to support 21st-century bioscience innovation,” says Craig.
Experts, including Humphreys, say Baxter’s decision will benefit the state in ways that go well beyond the impact of the plant itself, largely by helping to establish Georgia as a bioscience hub and making it more attractive to other companies in the sector, which traditionally has been concentrated in Cali-fornia, Boston and Research Triangle Park in North Carolina.
“First of all, [Baxter’s decision] validates the economic development strategies being employed at the Georgia Department of Economic Development, so it’s a win in that sense,” says Hum-phreys. “Plus, I think any time you get selected for a major project in an industry, other players in that industry take a second look at you.
“Closing this deal means we are more likely to get short-listed in the future and hopefully will improve our close rate,” he says.
Here’s a look at three prominent Georgia-based biosci-ence companies:
UCB: Treatments for Serious Diseases
Since 1995, Atlanta has been home to the North American headquarters of global biopharmaceutical company UCB. The company chose Atlanta for its North American operations largely because of its proximity to an international airport, providing easy access to its global headquarters in Brussels, says Kristie L. Madara, director of U.S. corporate communications.
UCB’s North American operations account for approximately 40 percent of the company’s $4-billion global business. The company’s focus is on treatments for central nervous system disorders, allergy/respiratory diseases and immune and inflammatory disorders. “We specialize in severe diseases,” says Madara. “Our drugs are for diseases like epilepsy, rheum-atoid arthritis and Crohn’s disease.”
UCB’s newest product – approved just last spring – is the Neupro (rotigotine) transdermal system, a patch for treating advanced early-stage Parkinson’s disease and moderate-to-severe restless leg syndrome.
With a 50-acre campus in Smyrna, UCB employs more than 400 Georgians. The company estimates its impact on the state to be $75 million.
GeoVax: Searching for an HIV Cure
Spun out of Emory University in 2001, GeoVax is an HIV vaccine company with one of the leading products in development to prevent infection from the form of the virus prevalent in North and South America and Western Europe. The hope is that the vaccine, which is currently in clinical trials, will be used to both prevent and treat HIV infection – and potentially, says GeoVax President & CEO Robert McNally, to cure it.
“Next year, we will be doing a clinical trial sponsored by the NIH [Na-tional Institutes of Health] that will combine our vaccine and standard care [with oral HIV drugs] to see if one can get to the point where the virus is non-existent,” says McNally. “It will probably take a few years to figure out, but that’s what the NIH wants.”
While its ambitions are big, the company itself is small, with 13 employees. GeoVax’s arrangement with contractors (to make the virus) and the NIH (to conduct the trials) keeps costs and personnel requirements low, says McNally.
“As a biotech, we don’t have product to sell yet,” he says. “We have to sell stock or survive on grant money.” When GeoVax’s product is approved for marketing, it will likely be licensed to a larger pharmaceutical company, he says.
CardioMEMS: Hope for Damaged Hearts
Located between downtown and midtown Atlanta near the Georgia Tech campus, Atlanta-based technology com-pany CardioMEMS is in the business of helping damaged hearts. Its proprietary wireless sensing and communication technology is designed to help in the management of severe chronic cardiovascular diseases including heart failure, a condition that affects more than five million Americans and is responsible for one million hospitalizations and 200,000 deaths each year.
Using minimally invasive techniques, doctors can implant the CardioMEMs’ miniature wireless sensor, which transmits cardiac output, blood pressure and heart rate data that are critical to management of patients, says founder and CEO Dr. Jay Yadav. Due to their small size, durability and lack of wires and batteries, the sensors can be implanted permanently and, using radiofrequency energy, can transmit real-time data to external electronic readers that then communicate this information to the patient’s doctor.
The device, which has not yet received FDA approval, allows for frequent, on-demand, real-time monitoring of vital information, says Yadav. By enabling proactive patient monitoring, he says, the device holds the promise of reducing hospitalizations, improving a patient’s quality of life and delivering more efficient and cost-effective healthcare.
Summit Showcases Georgia’s Bioscience Industry
Each year since 2001, the nonprofit Georgia Bio has brought CEOs, senior executives, scientists and public policy officials from Georgia and across the nation to showcase Georgia’s leadership in innovation – from basic research to manufacturing – to improve the health and well-being of people, animals and the environment.
This year’s daylong summit, with the theme “Innovation for Global Health,” will be held Oct. 3 at the Georgia International Convention Center in College Park. It will feature more than 50 speakers, who will participate in panel discussions exploring trends and issues in the areas of therapeutics, diagnostics and vaccines; medical technology and devices; the changing landscape of pharma; and exciting new science, says Georgia Bio President Charlie Craig.
Keynote speakers are Brien Johnson, vice president of program management, plasma bioscience for Baxter Healthcare Corp., and Alex Gorsky, CEO of Johnson & Johnson.