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Backing a Hobbled Horse?
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Business New Haven
6/24/2002
By:
BNH
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News flash: As an industry, biotechnology is a loser.
A big-time loser, in fact. According to the Biotechnology Industry Organization (BIO), which earlier this month hosted its BIO 2002 annual meeting in Toronto, the biotech industry rang up $5.8 billion in net losses in 200.
Economic-development officials from some 130 states, cities, regions and countries - including, naturally, Connecticut - descended on the confab with eyes squarely on the prize: luring biotechnology businesses.
The fly in the soup in Toronto was provided by the Brookings Institution, which released a report at the meeting asserting that no regions except existing leaders in biotechnology could expect to see much success in efforts to develop this sector.
Those existing "winers" do not include New Haven spcifically or Connecticut generally. In addition to the traditional biotech hotbeds of Boston and San Francisco they do include San Diego, Seattle and Raleigh-Durham, N.C.
Connecticut has made substantial investments - financial and psychological - in building its biotechnology base as an economic-development linchpin. Gov. Rowland has identified bioscience as one of the state's most favored industry "clusters."
Connecticut United for Research Excellence (CURE, which next month will relocate from Rocky Hill to 3,000 square feet of office space at 300 George Street in New Haven), was born in the 1980s to defend companies like U.S.Surgical Corp. against anti-vivisectionist critics. Now CURE has restyled itself as "Connecticut's bioscience cluster" and issues breathless press releases touting the promise of biotech firms in the Land of Steady Habits.
The truth is that Connecticut biotech compnaies, and their stocks, have taken a thrashing. From a high of almost $40 last summer, Branford genomics darling CuraGen had tumbled to $6.35 by June 18. Over a similar period Science Park baby Genaissance plummeted from more than $14 to just over a dollar and a half.
Some of this, of course, may be attributed to macroeconomic trends and the NASDAQ implosion of the last 24 months. And it doesn't mean that those responsible for public policy at the state level shouldn't be alert to opportunities to nurture a still-promising industry.
But the line between promise and fool's gold is a thin one, easily blurred. There's a tremendous herd instinct at work, too. At last count 41 states have some sort of active strategy in place to grow their biotech industrues. Common sense confirms that not all will succeed.
Noted economist and Brookings report co-author Joseph Cortright, "It's unlikely many of these biotech companies will grow into full-fledged manufacturing firms that produce lots of jobs."
Connecticut does have some powerful existing weapons in its biotechnology arsenal in the form of four major pharmaceutical companies, and of course the recently awakened Yale University Office of Cooperative Research and the millions of dollars it attracts to academic bioscience research efforts. Recent developments are encouraging, including newly financed start-ups such as Achillion, RibX and Agilix.
Nevertheless, tightening cash reserves at companies such as the seasoned and already public Vion Pharmaceuticals should remind us that biotech isn't rocket science - it's much harder.
Local and state officials would be unwise to keep all their eggs in the biotech basket.
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