POLITICS

The biotech boom
State should offer incentives to grow industry in state

The huge expansion of Lonza Biologics that is under way at the Pease International Tradeport is an indication of the growth — and importance — of biotechnology to the local and state economy.

Lonza, one of the world's leading suppliers to the pharmaceutical, health care and life science industries, broke ground recently for an expansion of its facility off International Drive that could bring as many as 350 new jobs to the Seacoast.

The ground-breaking was part of an expansion of the company's facilities worldwide, including the construction of Lonza's second large-scale mammalian facility in Singapore that took place in March.

The 330,000-square-foot new facility is designed to house cutting-edge biotherapeutics manufacturing technologies, as well as offices, a warehouse and support systems. The facility is designed with new, high-concentration processes in mind.

Lonza produces bioproducts that play a role in the development of new medicines and health care products. It is also a provider of value-added chemical and biotech ingredients to the nutrition, hygiene, preservation, agriculture and personal care markets.

At present, the existing facility has a 93,000-liter capacity. The construction of a new bioreactor as part of the new facility will add another 5,000 liters. The reactor "" an apparatus, such as a large fermentation chamber, for growing organisms such as bacteria or yeast that are used in the biotechnological production of substances such as pharmaceuticals, antibodies or vaccines, or for the bioconversion of organic waste "" is due to come online in mid-2008.

Biopharmaceuticals are one of the key growth drivers of the pharmaceutical and biotechnology industries, and the sector is booming. Approximately one-fourth of new drugs coming on the market are biopharmaceuticals, generating in excess of $35 billion in 2004, with annual sales projected to surpass $52 billion by 2010.

With biological products due to take center stage in the pharmaceutical industry over the coming years, Lonza, a contract manufacturer, is taking the necessary steps to make sure it is set to grab a large piece of the pie.

And it seems to be working. Reuters reported recently that the firm said its 2007 performance would exceed previous guidance and that it confirmed its mid-term targets until 2012.

According to the report, Lonza expects annual sales growth of 8 to 12 percent and operating profit growth of 15 to 20 percent through to 2012.

The New Hampshire Economic and Labor Market Information Bureau notes there is no one specific "biotechnology industry." It really encompasses three segments: research and development companies; laboratory testing facilities, and manufacturing.

Employment in these areas in the state of New Hampshire has grown rapidly since the early 1990s, the NHELMI indicates. The industry made up barely 10 percent of the total chemical manufacturing employment at that time, with just more than 100 workers.

Since then, biotechnology has grown to account for nearly half the employment in this area. In 2006, approximately 800 workers were involved in biotechnological-related jobs.

The two phases of the biotechnology industry that operate here in New Hampshire "" pharmaceutical manufacturing, and research and development "" also offer some of the highest wages in the state. The NHELMI says that may be because jobs in these areas require highly specialized and unique skill sets that need constant updating because of the pace of technological advances in these fields.

And the salary rates in these fields continue to far outpace the growth in remuneration in other industries in the state.

In 1990, the average weekly wage in firms doing research and development was approximately $745. In 1991, the average salary in the medical and pharmaceutical manufacturing industries was about $555 a week.

Even at that time, the R&D wage was approximately 23 percent higher than the state average. In 2006, the NHELMI reported the average wage for an R&D worker was $1,100; 33 percent higher than the state average.

In 1990, the average wage in the medical and pharmaceutical manufacturing field was already 42 percent higher than the national average. In 2006, the average weekly salary in this industry grew to approximately $1,860, almost double the average weekly salaries in all other industry in the state.

Many have bemoaned the "brain-drain" taking place in the state. Many of its best and brightest minds are being drawn to other states by the higher wages being offered.

One way to stop this outflow is for the New Hampshire Legislature to develop ways to offer biotech companies incentives to expand or relocate here. The research and development tax credit, although extremely limited at $1 million for all companies in the state, is one of the options that needs to be enacted and, in subsequent years, expanded.

The emphasis the Legislature puts on expanding its biotechnology-based economic infrastructure could spell the difference between maintaining "" and increasing "" the state's economic viability in today's constantly changing global economy or sinking to the bottom of the economic food chain.

Shir Haberman is the business and political writer at the Portsmouth Herald. He can be reached at shaberman@seacoastonline.com