If there’s one thing that New Jersey is known for in this industry, it’s as anchor of the East Coast pharma belt. With such a concentration of attractive customers, you’d expect genomics companies to have swarmed the area. So why is it that despite its large biotech presence, only a handful of genomics firms have located there?
Last fall, the New Jersey Economic Development Authority heralded the news that GeneProt would relocate its corporate headquarters and build a large-scale proteomics facility in North Brunswick. A coup for the state, it served even further to point out the dearth of a genomics stronghold in such an obvious place for one.
From the state’s perspective, it’s not for lack of trying. Amid cheers over the GeneProt deal came word that Valigen, a genomics company that had signed a 15-year lease in May 2001 at a Hopewell facility, had lost its expected funding and would have to close its doors.
According to Debbie Hart, executive director of the Biotechnology Council of New Jersey, the state’s tax and incentives program is more comprehensive and has been around longer than most others. For example, New Jersey “was the first to offer the tax credit transfer program, which enables unprofitable companies to sell their net operating losses to profitable companies for cash,” Hart says.
The real problem, say some people trying to lure genomics to the Garden State, is simple: there just isn’t enough room. Howard Sobkov, an investment analyst for Townsend Capital, which owns the Princeton Biotechnology Center where Valigen was briefly based, says there’s about eight times as much demand for space than there is space available. That’s “regardless of geographic area or sector in biotech,” he adds. For a time, “no one was willing to build them space” — many facility owners didn’t see the value of paying for expensive renovations to lure a nascent industry. Sobkov says the state has learned its lesson, but the lag time will hamstring it in the near term. “It’s not going to happen in the next six months,” he says. “Two to three years out you’re going to see a real boom.”
Matt McDevitt, a life sciences specialty real estate agent who works with the Princeton Biotech Center (a former Lucent base), says that all of the buildings on the 280-acre campus are being renovated for biotech companies. The project’s expected to be completed by the first quarter of this year, he says.
“Our Valigen experience, if anything, so far has made us more firm in our belief that our lab space is validated,” Sobkov says, pointing out that one result of the exposure from that situation was that other companies came in to look at the space. The Hopewell campus currently has 329,000 square feet of space, but the town has granted development rights up to 800,000 square feet if Townsend Capital chooses to expand, which Sobkov believes will happen.
He’s not the only hopeful one. GeneProt moved into the Technology Centre of New Jersey, another campus jockeying for genomics tenants. And the Biotechnology Council is trying to get developers to build more lab space to accommodate demand, Hart says.
Still, the state that could have been a shoo-in for genomics hotbed will have to compete fiercely to catch up with those that have had early success with incentives, such as North Carolina, Michigan, and California.
— Meredith Salisbury