January 4, 2011
Decade of Discovery
Guest Commentary by Russell Herndon
With six world championships over the past decade, including three Super Bowls, two World Series, and one NBA Championship, Massachusetts’ major sports teams rightfully enjoy their position atop the nation’s major sports leagues. But they are not alone. With less fanfare but equal success, Massachusetts has led the nation in another area over the last decade – biotechnology.
MassBio’s most recent “Industry Snapshot” illustrated the success of biotech in Massachusetts; the report is full of statistics showing the industry expanding and creating research, development, and manufacturing jobs in Massachusetts. Our state is one of only four states to create biotech manufacturing jobs in the last ten years.
Massachusetts biotech industry employment reached an all-time high in 2009 and now generates $4.2 billion in payroll activity. Massachusetts biotech’s 19.7 percent job growth from 2005 to 2009 outpaced the 5 percent job growth in all other sectors in the state. Massachusetts biotech also enjoys the support of investors, capturing 26 percent of all biotech venture capital investment nationwide in the first half of 2010. These represent concrete examples of our industry’s success in Massachusetts. According to MassBio, biotech companies based in Massachusetts have commercialized 141 products that treat 90 different medical conditions.
Even though Massachusetts biotech captured the bulk of venture capital investment in 2010, these are tough times. Developing biotech treatments and therapies is a significant challenge, and the investment needed is astonishing. It typically takes more than a decade and more than $1 billion to bring a new groundbreaking drug to market. During the economic downturn, the high risk nature of biotech investment has caused available capital to dwindle, leading to more and more research projects being delayed or shelved due to the lack of capital to support them.
Many biotech companies are small businesses struggling to scrape together the capital needed for the long process of completing the research, development, trials, and other steps toward producing a cure or treatment. When private investment is elusive, sound public policy can create an environment where investment, innovation, and discovery can continue. The Therapeutic Discovery Project (TDP), a new federal tax credit and grant program designed to encourage investment in small biotech companies developing new therapies, is just such a policy.
The Therapeutic Discovery Project supports breakthrough medical discovery, innovation, job creation, and job sustainability in small Massachusetts biotech companies like mine. The program also bolsters our nation’s ability to compete on the global stage. The TDP empowers small biotech companies by providing much-needed capital and incentives for investment in research and development. It keeps America competitive with countries that substantially investing in their biotech industries, including China and India.
The TDP awarded more than $128 million to 312 Massachusetts biotech companies to support 558 critical life sciences research projects. My company, Hydra Biosciences in Cambridge, received nearly $750,000 to develop novel compounds to treat pain, inflammation, and pulmonary diseases using its expertise in Transient Receptor Potential (TRP) Ion Channels.
The infusion of capital for small biotech companies provided by the TDP will have a positive impact on competitiveness, jobs, and life-saving treatments. In a recent Biotechnology Industry Organization (BIO) survey of American biotech company leaders, 72 percent said the TDP will have a positive impact on global competitiveness for small American biotech companies. Additionally, 75 percent said TDP will have a positive impact on job sustainability and 76 percent said TDP will have a positive impact on advancing life-saving cures and therapies for patients.
TDP awards for small biotech companies totaled $1 billion this year. Every TDP dollar went to saving or creating an American job or advancing important scientific research. Congress should extend and expand this successful federal policy that supports American jobs, American biotech innovation and leadership, and small American companies searching for medical cures. If that happens, Massachusetts biotech’s decade of discovery will continue.
Russell Herndon is CEO of Hydra Biosciences in Cambridge.