A public-private group formed to develop a 1-million-square-foot life-sciences campus in San Juan, Puerto Rico, will submit a master plan detailing the project later this month to the commonwealth’s Governor.
The Puerto Rico Science, Technology and Research Trust plans to transform the 83-acre Oso Blanco state penitentiary site into a four-phase biotech campus that would over 20 years broaden the island’s life science industry beyond its longtime strength of pharmaceutical manufacturing.
The trust plans to start constructing Science City’s 250,000-square-foot, $400,000,000 first phase later this year, soon after the Puerto Rican government transfers the prison site to the trust.
The master plan will be finalized on June 30, Luis Rodriguez-Rivera, the trust’s executive director, told BioRegion News. “We will see about the first 250,000 square feet of that in the first five years, and then each succeeding five-year period, we’ll increase it by another 250,000. That’s what the plan looks like now, but that can vary depending on the speed that the whole project develops.”
The first phase would consist of infrastructure as well as incubator space the trust would operate with the University of Puerto Rico or other institutions.
“We’re looking to serve as the host to all type of small-scale research activity in order to spin off those companies. Given the synergies that are going to be developed in this corridor, we’re also gong to have institutional companies wanting to have lab space there,” Rodriguez-Rivera said.
The trust would finance the first and second stages totaling 500,000 square feet, with the possibility that research institutions could finance and build later phases, Rodriguez-Rivera added. “We’re willing to do up-front public financing to enter into public-private relationships once the entire city is operating.”
Rodriguez-Rivera was among five academic, economic development, and government leaders who discussed Puerto Rico’s promise and challenges as an emerging biotech cluster in a June 15 conference call.
Also participating were Puerto Rico’s secretary of economic development Ricardo Rivera, University of Puerto Rico President Antonio García-Padilla, and two officials from the Puerto Rico Industrial Development Company: its executive director Boris Jaskille and the director of its life science group Enrique Mirandez.
Officials envision PRIDCO would issue bonds for the Science City project on behalf of the trust, and could secure private as well as public financing – though other financial arrangements haven’t been ruled out.
Science City — which would also include a hotel-conference center, “lifestyle-village” style retail, office space, and housing — would rise within a 2,000-acre “Knowledge Corridor” that would link the new R&D campus to existing biomedical institutions as well as new ones now being built.
The current Rio Piedras campus of the University of Puerto Rico, its Medical Sciences Campus, Botanical Garden, and Medical Center would be linked with future institutions now under construction, including:
• A 90,000-square-foot molecular science facility, a joint project of the government, the University of Puerto Rico, and the US National Institutes of Health. Work began in May for the facility, set to be completed in August 2009.
• A 40,000-square-foot expansion of the Puerto Rico Cancer Center by the government of Puerto Rico and the M.D. Anderson Cancer Center. An older building on the University of Puerto Rico campus began renovation in April, with the new research space to be completed in October 2008.
• A 5,000-square-foot pavilion that will allow the Botanical Garden to carry out research on medicinal and poisonous tropical plants, something García-Padilla was designed to meet a need of pharmaceutical companies like those now on the island.
Puerto Rico is home to 12 ag-biotech companies, Rodriguez-Rivera said. The island wants to expand that specialty further. One pilot project at the Anderson Cancer Center involves extracting from tropical coral compounds believed to help ward off cancer.
“We see botanical biotechnology as one of the areas that will strengthen our offerings to researchers and companies that are in the area of drug discovery and development. It’s a natural area for us to focus on because of our climate,” Rodriguez-Rivera said.
By year’s end, the Botanical Garden will also start renovations to convert a university lab building into 10,000 square feet of new wet labs. The building was originally built as labs for a rum-industry support development project in the 1940s and 1950s. Three or four months of additional planning will be needed before work can begin, García-Padilla said.
Puerto Rico is not limiting its biotech cluster to San Juan. In the western Puerto Rican city of Mayaguez, a 17,000-square-foot building is being built with research space for UPR Mayaguez researchers, plus bioprocessing facilities for early-stage companies as well as an amphitheater for training pharma manufacturing employees. UPR Mayaguez has operated an industrial biotech program since 1994.
In developing Science City and the broader Knowledge Corridor, Puerto Rico hopes to expand a life sciences industry now best known for its concentration of pharma manufacturing.
“Our natural evolution leads to a Puerto Rico that is more of a comprehensive life sciences center or excellence that includes not only manufacturing but also pre- and post-manufacturing activities, obviously research and development of new products and processes, and sales, marketing and distribution of these products.”
“In order to strengthen the manufacturing activity that we have in Puerto Rico, we need to expand the value chain,” Mirandez said. “Our natural evolution leads to a Puerto Rico that is more of a comprehensive life sciences center or excellence that includes not only manufacturing but also pre- and post-manufacturing activities, obviously research and development of new products and processes, and sales, marketing and distribution of these products.”
Fifteen of top 20 prescription drugs sold in the US last year are produced on the island commonwealth, and the sub-sector is growing. Last April, Acevedo-Vilá and other Puerto Rican officials celebrated the completion of a $450 million, 330,000-square-foot biologics manufacturing plant in Barceloneta by Abbott Laboratories.
Last year, Amgen launched a $1 billion, four-year expansion of its facilities that includes adding to an existing bulk protein-manufacturing facility and building a new formulation, fill, and finish plant. The expansion is expected to create 500 new jobs by 2010.
Pharmaceuticals and other US companies can avoid paying federal taxes on revenues generated in Puerto Rico unless they repatriate their earnings to the US. However, companies are required to pay corporate income tax ranging from 2 percent for companies in “pioneer” industries developing new technologies such as biotech, to 7 percent for other manufacturers and export-service companies.
However, these costs haven’t stopped US biotechs from working on the island. One reason: US companies kept the federal wage credits intact despite a repeal by Washington, DC, of a law that would have eliminated them.
“Puerto Rico is not presented as a low-cost jurisdiction but rather as a comprehensive life sciences location,” PRIDCO’s Jaskille said.
Puerto Rico also has a growing supply of skilled workers, he said: The number of science and engineering PhDs awarded by the University of Puerto Rico has jumped from 9 in 1991, to 17 in 1996, to 36 in 2001, to 48 last year.
When masters and bachelors degrees are included, this year a total 9,000 degrees in science, technology, and engineering will be awarded by institutions in Puerto Rico, and officials want to see even more such graduates in the future.
“We will increase the numbers of PhDs and masters [degrees],” García-Padilla said.