Watch Out SF, Boston Is Turning Into Biotech’s No. 1 Cluster
(Page 2 of 2)
highly concentrated place in the world for life sciences innovation, in terms of bright people and bright ideas per square foot. There’s no other place in the world with biotech companies big and small, Big Pharma, world-class biomedical researchers, top clinical collaborators, thousands and thousands of talented employees, and venture capitalists all within walking distance.
When I travel to Boston, all I need is a hotel room, a subway pass, and good walking shoes to pack an amazingly efficient day of meetings with innovators. If I need to go to meet companies along Route 128, I’ll just rent a Zipcar from Kendall Square for a day. Travel to San Francisco or San Diego, and I have to rent a car (often overpriced) and spend a fair amount of time traveling around suburban office parks, sitting in traffic.
The difference in land use and transportation has helped turn Boston into a tight-knit community. When it’s easy for bench scientists, business development directors, or CEOs from different companies to talk shop or commiserate, they do. And they help each other. “When you are struggling with some kind of issue, you call up five of your friends at other companies and ask how they dealt with something like that,” says Adelene Perkins, CEO of Cambridge-based Infinity Pharmaceuticals (NASDAQ: INFI).
David Schenkein, the CEO of Cambridge, MA-based Agios Pharmaceuticals, has had the experience of living in both the East and West Coast’s top biotech hubs, and he says the density of Boston translates into a competitive advantage. He joined the biotech industry in 2001 at Cambridge-based Millennium Pharmaceuticals, moved to Genentech from 2006 to 2009, and returned to Boston to run Agios. He says Genentech was an amazing place that lived up to its reputation for excellence, but it’s also geographically isolated at its campus on a hilltop in South San Francisco. That isolation doesn’t help foster the kind of company-to-company networking and cross-pollination of ideas that happens when so many people in the industry are within walking distance.
“The thing in Boston is proximity,” Schenkein says. “At least twice a week, somebody from the Broad Institute, the Whitehead Institute, or Harvard walks to our building to share some data they want to review with us, or I just walk over to their building. It makes life a whole lot easier to not have to get in your car.”
OK, you might say, getting in a car for 20-30 minutes and finding a place to park is no big deal. And people often argue that the West Coast has greater recreation/outdoor/quality-of-life opportunities that Boston can’t compete with. But the Bay Area also has some real problems with stratospheric housing costs that discourage young people getting started in their careers. Bad transportation and land use policies from decades ago tend to isolate people, keeping them walled off in their professional silos. That isolation keeps people from gaining that kind of peer-to-peer understanding that Perkins says she can get in the Boston network.
Having such a tight-knit industrial community creates a lasting competitive advantage. When people feel connected to a community, they tend to put down roots, knowing that while their company might be risky, they will easily find another job down the street without having to move their families. And they can easily diversify their skill sets in Boston by moving around a few times in their career to different kinds of organizations.
“The biggest advantage I can see building Agios in Boston rather than San Francisco or New York or Boulder is my ability to go from 15 employees to 75 employees in two years, and keep getting A-players,” Schenkein says.
Of course, once a place attracts this many smart people and gets this much critical mass, the advantage tends to create a virtuous cycle. Look at Sarepta Therapeutics (NASDAQ: SRPT). This company recently nailed an important clinical trial with a drug for Duchenne Muscular Dystrophy. It needed to recruit a bunch of new people with expertise in rare diseases. When it couldn’t get the people it said it wanted to move to its headquarters in Seattle, the company moved its headquarters to where the recruits were—Boston.
One other advantage, not to be underestimated, is Boston biotech’s edge in political status and clout. When I traveled to the Biotechnology Industry Organization’s conference in Boston in June, I was amazed that the hometown paper, the Boston Globe, considered BIO’s convention to be front-page, above-the-fold news in the Sunday paper. Flipping channels that evening in the hotel, I saw the CEO of the Massachusetts Biotechnology Council being interviewed on New England Cable News about what the Bay State can do to flex even more biotech muscle.
Coming from the West Coast, this amount of attention for biotech is eye-opening. Unless anti-industry activists raise an enormous stink about biotech, it doesn’t make mainstream news. If you live in the Bay Area, your town is dominated by Apple, Google, Facebook, etc.—and unless you work in the industry, you may never have heard of Gilead Sciences (NASDAQ: [[ticker:GILD]). San Diego has some good biotech assets, but most folks think of it first as a military town, or as a wireless infrastructure (Qualcomm) town. Seattle has Boeing, Microsoft, Amazon, Starbucks, Nordstrom, Costco, and no flagship biotech company.
In Boston, if you define healthcare loosely to include all the hospitals, biomedical research, and biotech and Big Pharma, then healthcare is the state’s undisputed No. 1 industry. As Millennium’s Dunsire said at an Xconomy event last week, there are 450,000 people working in healthcare in Massachusetts. That many people in one group creates clout. In Massachusetts, elected officials know this and want to do what they can to help biotech. Even though elected officials can’t always throw big bucks into the industry, this support can mean the difference when a company needs a permit or some smaller issue. And it provides a psychological boost to the companies who know they will be heard and not just get a cold shoulder from their elected officials.
One last point about culture. There’s always been some cultural divide between the coasts, and I suppose people will never stop arguing about it. People on the West Coast sometimes like to trot out stereotypes about the sharp-elbowed competitors in Boston, how they can’t collaborate as well as us laid-back West Coasters. That’s just not consistent with the Boston I’ve experienced. If anything, there’s more of a tight-knit collaborative community in Boston than in San Francisco. There’s a can-do spirit, an energy in Boston that is palpable. It will endure. Boston is reaping what it has sown for decades.
“You can feel the sense of common purpose,” says Tuan Ha-Ngoc, the CEO of Cambridge-based Aveo Oncology (NASDAQ: AVEO), who started his biotech career at Genetics Institute in Boston in 1984. “We are all here, we run scientific organizations, we run hospitals, we run companies. We know the future is out there for us.”