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2006 Industry Report: Life Sciences

Biotech develops formula that nutures job growth

Prescriptions

TREND: The number of research-and-development jobs in North Carolina grew 48% between 2000 and 2004. Even manufacturing jobs, increasingly scarce in other sectors, are on the uptick.

OUTLOOK: Overall job growh of 5% to 10% this year.

Several times a week during much of the last year, Monica Doss answered her phone to find someone from the West Coast calling to ask about the state’s life-sciences industry. Most were California biotech veterans. About half told her they planned to move to North Carolina — whether a job was waiting or not.

Doss, executive director of the Research Triangle Park-based Council for Entrepreneurial Development, says what’s triggering the calls is a widening sense that something big is brewing in the Tar Heel State. Those California biotech execs feel it. So do business lawyers and venture capitalists around the Triangle. They’re getting lots of inquiries about startups and seed capital. “You can’t even get some of these people to come out for a cocktail reception,” she says. “They’re all busy. There is a groundswell.”

In June, the Milken Institute, a Santa Monica, Calif.-based think tank, said North Carolina had the nation’s fastest-growing life-sciences work force. Ernst & Young, in its 2005 review of the biotech industry, cited North Carolina as one of the nation’s biotech hot spots. “Things look very rosy,” says Barry Teater, spokesman for the North Carolina Biotechnology Center.

The Biotech Center estimates job growth of 5% to 10% in 2006, which could mean up to 4,500 jobs added to the estimated 45,000 in place at drug factories, contract-research labs and biotech companies. To help keep up, N.C. State University in Raleigh began construction last year of a $34 million Biomanufacturing Training and Education Center at its Centennial Campus. Scheduled for completion later this year, it will be able to train up to 3,000 workers a year.

But an even bigger potential boost to the industry is a $1 billion research center in Kannapolis proposed by California billionaire David Murdoch and backed by the University of North Carolina. Murdoch owns Dole Foods, the world’s largest fresh fruit and vegetable producer, and once owned Cannon Mills, predecessor to Kannapolis-based Pillowtex, a textile giant that shut down in 2003. Murdoch wants to convert a Pillowtex plant he bought in 2004 into a research center that focuses on nutrition and food science and could create up to 35,000 jobs. “With the right partnerships and cooperation, it could be a tremendous asset for that region and for the whole state,” Teater says.

Venture-capital investments in the Southeast through the third quarter of 2005 were 16% higher than 2004, and chunks of that helped brighten the future of two Tar Heel companies. Pittsboro-based Biolex Therapeutics, which develops complex proteins and antibodies, raised $36 million. It expanded its plant and doubled its work force to 90 in 2005. RTP-based Tranzyme, which is working on a heartburn drug, announced in May that it had raised $32 million. More money is on the way for startups. The Aurora Funds, an RTP-based venture-capital company focused on life science and information technology, raised $50 million for a fund to be used mainly in first-round financing.

There have been setbacks, of course. Quintiles Transnational, a Durham-based contract-research organization, started restructuring in 2004 and said in January 2005 that it would cut 316 jobs in addition to 230 it had eliminated the previous year. By the end of 2005, though, it was back to hiring. In September, Cambridge, Mass.-based Biogen Idec said it would lay off 160 workers at its RTP site. Biogen had to pull its multiple-sclerosis treatment Tysabri off the market in February after the FDA warned of possible serious side effects.

Otherwise, the news has been mostly good. Whitehouse Station, N.J.-based Merck will build its $300 million vaccine plant in Durham, scheduled to open in 2008, despite having to pull its arthritis drug Vioxx off the market in response to safety questions and lawsuits. Tokyo-based Arysta LifeScience said in July that it would move its North American headquarters to RTP from San Francisco, bringing about 65 jobs. Hospira, a generic drug maker based in Lake Forest, Ill., plans to hire 150 workers at its Clayton plant during the next four years. And London-based GlaxoSmithKline is spending $92 million to expand its pill plant in Zebulon and add about 200 jobs during the next four years.

State officials are optimistic that the good news will keep coming. “There will be an incredible amount of worldwide growth in biotech,” says Tony Copeland, assistant secretary of commerce for business, industry and international trade. “We believe North Carolina is going to remain in the forefront of that.”

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