[Updated 1:04 pm PT] They say you can’t go home again. But sometimes you can go home after a few years and notice that your home has changed quite a bit.
This past week, I went back to Wisconsin, where I’m originally from, to visit family and do some reporting. I stopped by the capitol, Madison, to take stock of what’s happening in Wisconsin biotech, and maybe come away with a story idea or two.
My bias coming into this visit was bi-coastal: Most of the action in biotech happens on the East and West coasts. Wisconsin, like several other Midwestern states, has a great research university, but hasn’t quite been able to leverage that asset into a thriving commercial biotech cluster. Like a lot of states and regions around the world, Wisconsin officials have worked hard to create a biotech hub, without making it into the major leagues. There’s a lack of venture capital, and the business culture doesn’t really support super-speculative biotech startups. When I left Wisconsin a dozen years ago, it was famous for its work in human embryonic stem cell research, but many people were moaning about how the commercial rights were licensed to a company in the San Francisco Bay Area (Geron).
Those perceptions, as I soon realized on this trip, are out of date and only half-true. It’s true that Wisconsin today has only one publicly traded biotech company headquartered in the state, Exact Sciences (NASDAQ: EXAS), and it had to dangle various state incentives to import that one from Massachusetts. There’s no locally based anchor tenant that area businesspeople can look to with pride, like Minnesotans look to Medtronic (NYSE: MDT). And despite years of concerted effort to lure more venture capital, there’s only one VC firm in Madison—Venture Investors.
But there are some surprising things happening. Wisconsin had about 31,000 bioscience sector jobs in 2010, according to an analysis of all 50 states by Battelle. Even from 2007-2010, the recessionary period when the biotech industry saw a 1.4 percent nationwide job decline, Wisconsin managed to buck the trend, as its bioscience job rolls grew by 5 percent.
Wisconsin benefitted in that analysis partly because Battelle chose to define biotech broadly, to include work on drugs, medical devices, research/testing, and agricultural chemicals/feedstocks. Using that definition, there were only eight states that saw 5 percent job growth or greater in that period of downturn. If you look a little closer at the data, there were really only three states—Utah, Arizona, and Wisconsin—that were able to produce 5 percent job growth from an already-large baseline of jobs.
Part of the reason few people take much notice of Wisconsin nationally, I think, is because the kind of biotech happening in the state just doesn’t tend to make headline news. There’s no massive 1,000-person R&D center here for Pfizer or Merck. Wisconsin can’t claim to have created the latest whiz-bang targeted cancer drug. Instead, the cluster tends to be strong in behind-the-scenes biotech functions like research instrumentation, reagents, medical devices, and agricultural biotech applications. And even though the University of Wisconsin has suffered from a steady erosion of state support, like many public research institutions, it is still a magnet for smart young people from around the world—an essential ingredient for all biotech clusters.
“The people that come out of the university, they like Madison. They enjoy being here,” says Laura Strong, president of Madison, WI-based Quintessence Biosciences. “You end up with a lot of people who want to stay.” [Updated and corrected, 1:04 pm PT. Strong’s title is president and COO, not CEO.]
Factors like high quality of life, good public schools, and low cost of living will always make some people want to stay. But ambitious people want action, and a taste of success that will make them yearn for more. And Wisconsin-based companies have done pretty well on this score, too. There has been a solid string of acquisitions over the years that have pumped wealth into the community. Carlsbad, CA-based Life Technologies (NASDAQ: LIFE), Switzerland-based Roche, San Diego-based Illumina (NASDAQ: ILMN), Marlborough, MA-based Hologic (NASDAQ: HOLX), and Sanofi’s Genzyme unit have all acquired Wisconsin companies.
For those not inclined for the high-risk/high-reward startup life, there are also high-paying, relatively steady jobs where people with advanced bioscience degrees can work. Promega, a lab supplies company based in Madison, has been independent since the late ‘70s, and now claims a respectable $300 million in annual revenue. Covance (NYSE: CVD), PPD, GE Healthcare, and Thermo Fisher Scientific (NYSE: TMO) all have significant branches in Wisconsin. Madison now appears to be growing another important company in Cellular Dynamics International, which UW stem cell pioneer James Thomson co-founded to help disseminate fully functioning human cell lines to researchers. Cellular Dynamics, founded in 2004, now has more than 100 employees.
A strong cluster also needs some degree of collaboration between nonprofit and for-profit institutions. Wisconsin scores well on this count, too. The Wisconsin Alumni Research Foundation (WARF) has been working to spin out university inventions into the business world for more than 80 years, in order to make sure UW-Madison serves as a source of ideas that can benefit society at large. The state has highly experienced clinical trial sites in Madison, Milwaukee, and Marshfield, and there’s a higher-than-average percentage of citizens here who are willing to participate in clinical trials.
The state biotech association, BioForward, has been working for 25 years on helping stir more biotech growth in Wisconsin. It’s done the usual things, like pushing for tax incentives, recruiting companies from out of state, hosting networking events, and raising the flag at the Biotechnology Industry Organization’s annual convention.
Bryan Renk, the group’s executive director, notes that he’d still like to see more venture capital to support young companies in Wisconsin. And the various perceptions that people have—that Wisconsin’s taxes are high, it’s not “business friendly” and that biotech is bicoastal—don’t help the cause. But without much fanfare, Wisconsin has started to sneak up on people.
“No one is hiring hundreds of people, but everybody’s adding a few,” says Kathy Collins, BioForward’s director of business development. “When you add it all up, it moves the marker. It’s slow, steady growth.”
Stories like this, which tell of gradual change, can be easily overlooked. People today tend to gravitate toward the quick fix. Then again, plenty of economic development officials around the country would be happy with “slow, steady growth.” Slow and steady doesn’t usually make headlines. But Wisconsin is showing that a long-term commitment to fundamental biotech, not necessarily the latest shiny new things, can pay dividends. The tortoise, we should all remember, won that fabled race with the hare.