Regional Trends in Bioinnovation Investment - Pharmaceutical Executive

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Regional Trends in Bioinnovation Investment

Pharmaceutical Executive


Philadelphia: The Next Cambridge?

The Cambridge example shows the necessity of engaging and incentivizing all stakeholders to create and maintain a successful and thriving bioinnovation ecosystem. Philadephia and the state of Pennsylvania is as an interesting counterexample, with similar parameters to Cambridge and Massachusetts. Philadelphia has four top-tier AMCs and universities (University of Pennsylvania, Temple, Thomas Jefferson and Drexel); the second-highest level of NIH funding by institution (Penn); many multinational pharmaceutical companies and large biotechnology companies; and a small concentration of early-stage biotech and life sciences companies. The state's second-biggest city, Pittsburgh, is home to the University of Pittsburgh School of Medicine, a top-ten medical school and ranked sixth for NIH funding, and Carnegie Mellon, a leading engineering school.

Despite this, the city and state is not considered a vibrant hub of bioinnovation. Why? Our premise is that the four key stakeholders have not yet been fully engaged in this goal.

AMCs in PA don't make realizing the value of their innovations a strategic imperative; none of the top ten AMCs most active in spin-out formation are in PA, despite the fact that Penn ranked third in European and sixth in US patents issued to it in the eight-year period ending in March 2013. In contrast, MIT ranks far below Penn in the number of patents issued, but was the second-most active, behind the UCAL system, in spinning out new life sciences companies.

In addition, there is a limited amount of VC funding available. While many pharma and biotech partners make their homes in the Philadelphia area, their deals in the last several years are focused geographically in Cambridge and Silicon Valley. Gov. Tom Corbett has spoken openly about making life sciences investment a priority in PA, but there are few tangible results to date. The much discussed "D2PA" program—discovered in PA, developed in PA—allocates just $10 million in the current state budget to invest in new companies. The Life Sciences Greenhouse and Ben Franklin groups, funded by the state to invest in new technologies across all industries, have invested only $23 million into 33 seed and 23 pre-seed companies, and $17 million into 40 companies, respectively, since 2003. Gov. Corbett has put forward several tax incentive plans that will take effect over the next several years and has convened a panel of business leaders to discuss approaches to building and supporting a bioinnovation ecosystem in PA. Taken together, however, these initiatives pale in comparison to the strategies taken by states with highly successful life sciences hubs. If bioinnovation is going to succeed in unleashing new growth in PA, more must be done to incentivize each of the four stakeholders to make investments—and take risks.








Amanda Christini, MD, is Director of Strategic Initiatives at Penn Medicine Center for Healthcare Innovation. She can be reached at
. Ken Kaitin is Professor and Director of the Tufts Center for the Study of Drug Development, Tufts University School of Medicine. He can be reached at
.


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