Dendreon CEO at WBBA Meeting: State Should Reject Income Tax, Inspire Young Scientists

10/22/10Follow @xconomy

Dendreon CEO Mitch Gold has said for years that he wants to make his company the anchor tenant for Seattle biotech. Now that his company has had a breakout success, he’s clearly got the full attention of 700 members of the biotech community who met this morning, wanting to know what can be done to create more companies like Dendreon.

For those just tuning in to this story, Dendreon made global news earlier this year when it won the first FDA approval for a therapy that actively stimulates the immune system to fight cancer. Seattle-based Dendreon (NASDAQ: DNDN) has been hiring hundreds of people to keep up with demand for this drug, and investors have given the company a market value of more than $5 billion. The company was worth about $38 million when Gold started as CEO on Jan. 1, 2003.

So Gold is no longer just another struggling biotech entrepreneur, but a guy hiring lots of smart people, and offering a therapy to men with prostate cancer that helps them live longer, with only mild side effects. Now that he has the floor, he took advantage of it at this morning’s event to make some unequivocal statements about what Washington can do to become a more vibrant biotech center.

First, Gold said the state shouldn’t pass a new state income tax that will make it harder to recruit talented executives. It could be a lot more aggressive about workforce training, like Georgia is. And the state could certainly do more to inspire and educate kids about careers in science.

I shared most of the pithy comments this morning in real-time while thumb-typing on my BlackBerry to my followers on Twitter. But I know most of the 700 people in this audience of biotech pros haven’t yet adopted the whole Twitter thing, so I thought I’d pass along the highlights here in these pages, which I know you’re reading (thanks for that, by the way!).

If you actually do want to start following me on Twitter, you can sign up for an account. You can click on my handle @ldtimmerman to start following the daily feed of stories that I write for Xconomy, some stories from others that I share, and the occasional musing about my love for running, mountaineering, and the Wisconsin Badgers. I’d also highly recommend you follow @adamfeuerstein, @matthewherper, @maverickny, @genomicslawyer, @fiercebiotech, @rleuty_biotech, @johncfierce, @michael_gilman, @popsalks to get started.

Dendreon CEO Mitch Gold

Dendreon CEO Mitch Gold

Anyway, to skeptical biotechies: I’ve learned that you can say a fair bit of stuff in 140 characters or less, and share interesting thoughts with people in real-time. Here’s a sampling of the material I knocked out on the BlackBerry this morning, in no particular order.

Mitch Gold: State of Georgia is really aggressive. Gave us $10m grant to train employees. Nothing like that in Wash St

Mitch Gold: Provenge took 15 years, $1.2B of capital. Not straightfwd path. Look to us as an example of perseverance in biotech.

Dendreon CEO Mitch Gold at WBBA mtg: Dendreon mkt cap was $38m when I started, $5B now. We are just getting started

Tom Clement: I raised $100m for a med device co, not possible today. Mirador raised $1m and got FDA approval, that’s the new way.

Jay Inslee: We are in a knife fight with other states to develop biotech industry. Need to set aside party differences to focus on this.

Mitch Gold: I hired COO Hans Bishop partly b/c Seattle has Gates Foundation, and his wife got a job there. Cluster effect very impt

Mitch Gold: Got to inspire youth. Every kid knows Bill Gates. Few know abt careers in science

Bob Nelsen: three of state’s top 4 life science investors will scale back if state income tax I-1098 passes

Mitch Gold: FDA lacks resources. Has rt intentions. We do ourselves a disservice if we lower the bar for approval.

Gov Gregoire: I have a $4.5b budget shortfall. Cuts are coming. Still need to invest in biotech, aerospace, greentech, IT

Gov Gregoire not mentioning the 40 percent budget cut to LS Discovery Fund. I’m skeptical of the job creation stats being tossed around

Gov Gregoire: many states mis-spent tobacco settlement $ on short term emergencies. WA st invested for future w/ life science discovery fund

Gov Gregoire: my 1st life science summit didn’t have nearly this many people. (About 700 people here today).

Mitch Gold: 1st met Jay Inslee in DC. He gets this industry. It’s not really abt creating jobs, but about changing lives of constituents

Mitch Gold: WA state shouldn’t pass income tax. Will make it tougher to recruit top East Coast talent

Mitch Gold: toughest challenge for us was getting top talent after Immunex got bought. That’s changing now that DNDN is a commercial org

Carl Feldbaum: FAA had to raise salaries to slow industry poaching of top employees. Not bad idea to help FDA staff

Carl Feldbaum: In 1906 at founding of FDA, food was more impt than drugs. Different story now.

Mitch Gold: FDA lacks resources. Has rt intentions. We do ourselves a disservice if we lower bar for approval.

Chris Rivera: WBBA bd unanimously opposed to WA st income tax I-1098.

Feldbaum: Chagas disease is little known killer in dev world. Genome of pathogen sequenced, still no good therapy. Needs industry champions

Carl Feldbaum: BIO was best job of my life, but I don’t miss working in DC. Political system too ‘bent out of shape, if not broken.’

WBBA’s Chris Rivera polling audience, on what group’s top priority should be. Attracting capital to WA is the winner. Recruit talent is No 2

Arch’s Bob Nelsen has a bumper sticker hanging on his name tag, against the proposed state income tax. Not afraid to stir the pot.

Heading to Gov Life Sciences conf/WBBA annl meeting in Bellevue. Fmr BIO pres Carl Feldbaum speaking, haven’t seen him in years. Will tweet

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  • http://www.lymanbiopharma.com Stewart Lyman

    One thing that I am struggling to understand is the repercussions of the I-1098 income tax issue. I get it that rich people don’t want to pay more in taxes. I’m opposed to 1098 because I think it will only be a short time before everyone in WA state will be taxed. My question is: why is it that we do not appear to have a competitive advantage now with our current tax structure? We have no individual income tax in WA state. Those in the Boston biotech cluster will pay a Massachusetts tax rate of 5.3%. Those at Merck, Roche, and the other big pharmas in NJ pay up to 8.97% in state income tax. Georgia, which we heard a lot about this morning, charges up to 6%; CT, home to much of Pfizer, hits individuals with up to 6.5% tax, and CA, with the Bay Area cluster and Amgen, among others, charges up to 10.55% income tax. So where has our competitive advantage been in past years in luring executives away from these other places? Are salaries proportionately higher in these other states to compensate for the higher taxes employees must pay? Why has VC investment here lagged some of these other states? Maybe state income taxes are really not such a big deciding factor in determining where one seeks and ultimately takes a job, or invests money?

  • Jeff Polk

    The proposed income tax will not make a difference in attracting management. On a $500k salary for a married couple, income tax works out to $10k, much of which is deductible from federal takes.

    If that’s what passes for logic in Mitch’s head why anyone would read the rest of the article is beyond me…

  • Peter Kaczkowski

    Jeff, I agree completely. The biggest frustration I have is that while a small income tax on income above 200k is claimed to be a huge burden, yet the same folks clamor for the state to do more for education and other more short term stimulus for business. Where is the money to do that going to come from?
    I’m in favor of tax incentives, which work because they are a quid pro quo. I say give tax breaks for people (and businesses) who create jobs. I am very skeptical of the argument that tax breaks in general will lead to job creation. As Stuart points out: with taxes so low now, where are all those hotshots that will supposedly be dissuaded from coming to WA after I-1098 passes?
    The anti-tax position seems short on logic and long on ideology (and on greed, perhaps?)