Pennsylvania Continues Aggressive Push For Life Sciences

By Ed Miseta, Chief Editor, Clinical Leader

When you attend the BIO International Convention, you expect to see large pavilions from states heavily involved in the life sciences. This year’s show was no exception. Major time and financial investments were clearly made by California, Georgia, Massachusetts, Texas, New Jersey, and … Pennsylvania? Yes, Pennsylvania (PA).

It’s no secret that PA Governor Tom Corbett is a fan of the life science industry, or that he has made growing the pharma, biotech and medical device industries in PA a priority during his tenure in Harrisburg. At last year’s BIO International Convention in Chicago, Corbett was even named BIO Governor of the Year. At the time, he spoke of the advancing effort his administration has put forth to strengthen and grow the presence of life sciences in PA. Those efforts have continued into this year as well.

I was privileged to have been invited to take part in a PA life science media tour, which took place in April of this year. The tour, which started off in Philadelphia and stretched all the way to State College (including the Millennium Science Complex at Penn State University), highlighted well over a dozen life science firms that are making a difference in PA and the incentives the state has in place to grow the industry even more. The actions of the administration, in conjunction with lower energy prices and the support of numerous economic groups (Select Greater Philadelphia, Team Pennsylvania Foundation, The Bedford County Development Association, Lehigh Valley Economic Development Corp. and others) have made life sciences a burgeoning employment sector in the commonwealth.

In addition to exhibiting at BIO, the state was also one of just 11 double helix sponsors (Georgia was the only other state), putting PA in the same class as Pfizer, Eli Lilly, Abbvie, Genentech, Takeda and J&J. PA had a large presence in the main concourse as well as a pavilion on the show floor, and entertained more than 100 guests at a pre-show reception and dinner at the San Diego Zoo. To say that PA is serious about life sciences would be a great understatement.

Get Everyone Pulling In The Same Direction

Jim Cawley, Lieutenant Governor, Pennsylvania

PA Lieutenant Governor Jim Cawley, speaking at the reception, noted the numerous efforts being made by the state to appeal to firms in the industry. The first is the Life Science Leadership Advisory Council. Unlike many commissions, the council was a concerted and focused effort that involved the Governor’s Office, the PA legislature, industry, academia and the investment community. Once a month, for six months, the group met to craft a 10-year plan for growing the state’s life science industry. “This is not something we crafted and then put on a shelf,” says Cawley. “Every month this administration, along with our partners at Pennsylvania Bio, continues to meet with all of these stakeholders to ensure we are moving this effort in the right direction.”

Cawley notes one recommendation that came out of that council was to increase the visibility of the life science sector in PA. It was that recommendation that led to the previously mentioned PA media tour. Other recommendations focused on financial help. For example, the state also had a R&D tax credit in place that was set to expire during Corbett’s first term, which would have hurt efforts to attract more life science companies to the state. On the recommendation of the council, not only was the life of the program extended, its funding was increased to the current level of $55 million.

“We also maintained a key component of the program, which allows entities with little or no tax to be able to sell their R&D tax credits,” notes Cawley. “This allows smaller companies the opportunity to raise much needed capital.”

The Keystone Innovation Zone is another long-standing program of tax credits that has enjoyed success over the years. It strives to take the state’s limited resources and target them strategically through an investment strategy. Small startup companies are located in close proximity to the state’s world-class universities so as to facilitate tech transfer. Last year saw a request for more than $15 million, a 20 percent increase in applications.

Carolyn Boser Newhouse, Deputy Secretary for Innovation & Investment, PA Department of Community & Economic Development

Innovate in PA is a brand-new program that facilitates the sale of $100 million of future insurance premium tax credits in order to raise revenue neutral capital to fund life science and other high-tech companies. According to Carolyn Boser Newhouse, Deputy Secretary for Innovation & Investment for the PA Department of Community & Economic Development, 50 percent of the funds raised from this effort go to the state’s Ben Franklin Technology Partnership, 45 percent goes towards venture capital investments and 5 percent goes to Pennsylvania’s three Life Science Greenhouses.

“Another effort we have underway to aid life science firms is the Discovered in PA - Developed in PA program,” says Newhouse. “This grant program put in place under Governor Corbett in 2011, promotes entrepreneurship, facilities technology transfer, builds capacity for regional economic development and serves as an outreach to businesses looking to grow. Recently, a $750,000 award was made to partners in the Philadelphia region to proactively retain and deploy some of the 5,800 highly qualified life science/bio professionals who lost jobs when many large pharmaceutical firms reduced R&D funding in 2008. The regional network utilizes a comprehensive approach to match the most commercially viable technologies from universities and other research institutions with teams of displaced professionals to create new companies and expand existing ones.  These new ventures are connected to existing incubator programs, resources and capital to accelerate their growth which keeps innovation and talent within the state.”

Poised to Grow In 2015 And Beyond

All told, the entire economic development effort in PA — including 70 total programs and $3.2 billion in funding — seems to be paying off. Employment in the life sciences sector has climbed back above the pre-2008 levels, and everyone in the administration is positive about the future of the industry. The southeast portion of the state is just across the river from New Jersey, and a very short distance from Boston, New York and the regulatory agencies in Washington, D.C. And, because of its central location, the state is also within a one-day drive of nearly 40 percent  of the U.S. population and 60 percent of the Canadian population, as well as six of the ten largest consumer markets in the U.S.

“Add in three major ports, six international airports and four class I (annual operating revenue of $250 million or more) rail lines, and you can see why the potential for life sciences and high-tech firms in PA is so high,” says Newhouse. “But you will not see us resting on our laurels. We are making an additional $7.4 billion investment over the next five years in our transportation systems, primarily the roads, bridges, public transit, and multimodal infrastructure, to insure our infrastructure is up to par. This administration is always looking at the long term and making the investments we believe are necessary for the state to prosper and remain competitive.”

If you would like to see the growth for yourself, you will have the opportunity to do so in 2015 when the BIO International Convention rolls into Philadelphia. I expect the governor and the rest of the state will roll out the red carpet and put on a show sure to impress the entire industry. I hope to see you there.