BioHealth Management, LLC Creating Global Partnerships in a shrinking world

The Massachusetts Life Sciences and Biotechnology Super Cluster

Boston and Cambridge Massachusetts at the epicenter

Nancy J. Levy, Ph. D.

NancyjLevy@biohealthmanagement.com

October 2009

Other current articles written by Nancy J. Levy and available on her home page

www.Biohealthmanagement.com

1. Potential US Funding for Sources International companies

Background The Massachusetts life sciences super cluster is one of the largest, best known
and well established centers for biotechnology and medical device research and development
globally. The super cluster encompasses the universities, hospitals and companies directly
involved in life sciences and a diverse, and an experienced group of supporting organizations.
The super cluster includes two of the world’s leading centers of innovation, Boston and
Cambridge. This is a brief review of the super cluster with what makes it unique, why and how it
continues to flourish, groups that make up the cluster and organizations to contact in this
leading edge of innovation.

Location, location, location. There are many reasons that Massachusetts has evolved to its
position as a leading life sciences super cluster. It has grown up in a location rich in academic
excellence. Starting with Harvard University, the oldest institution of higher learning in the USA
the state has expanded dramatically with the presence of 122 colleges and universities
(including Massachusetts Institute of Technology (MIT), Harvard, Tufts, Boston University and
the University of Massachusetts). These academic institutions have nurtured an innovation
economy with the focus on commercialization led by MIT who has had a long history of
collaboration with industry. These new ideas and innovations developed at the universities are
easily tested because of the close proximity of world renowned medical centers. Technological
commercialization has led to wealth creation for entrepreneurs who often start new companies
and also invest in the next round of innovation. This environment combined with its location,
with one-hour flights from 40% of the US market and 67% of the Canadian Market has
supported its role as a readily accessible innovation partner for industry and the closest U.S.
gateway to Europe.

From the rich heritage of universities the world renowned research hospitals and academic
medical centers have evolved. Massachusetts is home to the top five National Institutes of
Health funded hospitals, including Beth Israel Deaconess Medical Center, Brigham and
Women's Hospital, Children's Hospital Boston, Dana-Farber Cancer Institute, and
Massachusetts General Hospital. With federal and private funding, researchers at these
hospitals as well as Harvard University, the Massachusetts Institute of Technology, University of
Massachusetts, and other educational institutions have produced novel, paradigm shifting
research. Because of the long history of success and the superior level of research in the state,
Massachusetts receives vast amounts of federal grants that advance the biomedical industry.
The state has received 10% or more of annual National Institutes of Health (NIH) funds since
2005 and consistently ranks #1 in NIH funding per capita. Massachusetts has also received
over 13% of national Small Business Innovation Research (SBIR) funding since 2003, and
ranked #1 in SBIR funding per worker in 2006.

Companies Although the first biotechnology company Genentech was founded in San
Francisco's, in 1976, Massachusetts soon followed with what are today two of the most
significant biotech organizations. Biogen (now Biogen Idec), was founded in 1978, and
Genzyme, in 1981, are growing independent biotech companies based in Cambridge, MA. After
nearly three decades of growth, the state ranks as one of the most significant or the most
significant biomedical centers in the world. The Massachusetts life science industry is
comprised of approximately 600 biotechnology companies, more than 475 medical device and
equipment manufacturers and more than 75 pharmaceutical companies employing 75,000
workers. Over 60% of companies have fewer than 50 employees, a testament to Massachusetts
being a hotbed of young, innovative companies. Over this short span of time, Massachusetts-
based biopharmaceutical companies have already developed 50 large molecule drugs covering
a range of illnesses, including areas such as cancer, infectious and neurological diseases.
Today, there are nearly 1,827 drugs being developed in Massachusetts, representing over 7
percent of the global drug pipeline. Twenty-one of the top 50 biopharmaceutical companies by
revenue have a Massachusetts presence.
People Companies both large and small find that a unique set of conditions exist in
Massachusetts to give them the competitive advantage necessary to succeed in today’s
marketplace. Massachusetts has one of the most advanced knowledge and productivity
workforces in the USA thanks to the vast number of colleges and universities with a per capita
bachelor degree number that far exceeds the national average. Nearly 1 out of 7 jobs in the
state are in the life sciences. The basic science researchers and translational researchers in
these academic medical centers and universities attract strong federal research support. From
this support, these investigators produce "disruptive" technologies that can change the
therapeutic, device and diagnostic landscape. The state also has many talented entrepreneurs
who have built life sciences companies by licensing technology from academic institutions, and
by using their expertise in developing products. Approximately 6% of all global licensing deals
take place in Massachusetts.

Financing and growth The state also enjoys strong state and federal leadership with people
who recognize that policy has the ability to strengthen or weaken any part of the super-cluster.
There is an impressive array of economic development programs that support large and small
life sciences companies. There are tax benefits for workforce training, infrastructure, equipment
and financing for construction. The state contains multiple incubators for early technology
companies, offering support services as well as space and developed laboratory space for
larger organizations. The community is composed of at least 5 large healthcare angel
networks, over 50 venture capital groups not including the venture investing groups of all of the
large pharmaceutical companies in Massachusetts. (Nancy Levy has written comprehensive
article on “Potential US Funding Sources for International Companies” available from home
page of web site www.Biohealthmanagement.com)

Sector specific organizations There are four outstanding groups in Massachusetts that
support the industry and offer a wide variety of services. The oldest is the Massachusetts
Biotechnology Council (MBC) (www.massbio.org) which is a biotechnology trade organization
with membership driven activities. They offer educational programs, conferences and group
buying discounts. Their membership is composed of over 600 biomedical companies large and
small in Massachusetts and includes some globally. The equivalent to the MBC in the medical
devices industry is MassMedic (www.massmedic.com) with over 300 members dedicated to
promoting the unique interests of the medical devices community. The Massachusetts
government has two important organizations. The Massachusetts Office of Trade and
Investment (MOITI) (www.moiti.state.ma.us) represents Massachusetts in international relations
in life sciences and all other disciplines. In addition, in 2007 a $1 billion life science initiative, the
Massachusetts Life Sciences Center (www.masslifesciences.com) was created by Governor
Deval Patrick to provide more financial support to the industry.

The author of this document, Nancy J. Levy, Ph.D., is the Managing Partner and founder of BioHealth
Management LLC, an international biomedical advisory firm. Her areas of expertise include business
development, market development and clinical development with an international focus. She is based just
outside of Boston and spends a significant amount of time using her expertise to build bridges between
the USA and other countries. She has written other articles including “Potential US Funding Sources for
International Companies”. To learn more about the Massachusetts cluster please contact her. Website:
www.Biohealthmanagement.com e.mail: nancyjlevy@biohealthmanagement.com tel: 617-680-2010