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Bucking Budget-Cutting Trend, Indiana Gives Roche Dx Rich Incentives to Expand in Capital

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At a time when most state governments are facing mammoth budget shortfalls and cutting services across the board, Indiana is using biotechnology to buck the trend.

Last week, the state and the city of Indianapolis said they will offer Roche Diagnostics a rich assortment of financial incentives to expand its operations on the city’s outskirts. As a result, the Swiss drug and diagnostics giant will invest more than $135 million in its Indianapolis facility as it embarks on a plan to expand R&D, laboratory, manufacturing, distribution, and information-technology operations.

The expansion, which is expected to create around 600 new jobs at Roche’s massive Indianapolis campus over the ensuing 10 years, is intended to support growth in the company’s five diagnostics business areas: diabetes, central diagnostics, applied sciences, molecular diagnostics, and point of care.

In return for these “business improvements,” Roche Diagnostics said it will receive over the next 10 years up to $22.2 million in local and state “economic-development incentives” in the form of income-tax credits, training grants, property tax-abatement savings, and public-infrastructure improvements.

Roche spokesman Joel Reuter said it is too early to say which disciplines will be the likely benefactors of the 600 jobs. However, he told SNPtech Reporter the new hires, which will be “incremental but steady,” will reflect the company’s current non-administrative departmental breakdown: 35 percent in engineering and science; 22 percent in sales and marketing; and 6 percent in customer service and technical support.

About 60 jobs will be created this year, with the rest spread out over the next nine years, said Reuter. The jobs Roche aims to create will pay an average of $63,000 a year and be in a range of skill areas that include sales, engineering, production, and administration, according to the Indianapolis Star.

The first project in the expansion, meantime, is a 108,000-square-foot wing, scheduled to open later this year, designed to manufacture a new version of Roche’s blood-glucose test strips.

Indianapolis is expected to offer almost $13 million in property-tax abatements, and perform at least $250,000 in infrastructure improvements at the site. The state, meantime, has approved a plan to award upwards of $9.4 million in various financial incentives, including $7.6 million in payroll-tax credits, $1.37 million in training grants, and up to $375,000 in a matching grant to the city for the infrastructure work.

However, the city stressed that most of its economic incentives will not be granted unless Roche fulfills its promise to expand its footprint and create new jobs.

Roche maintains its North American diagnostic headquarters in Indianapolis. Roche inherited the site, which sits on 150 acres and employs 2,150 people, from Boehringer Mannheim.

When adding to its Indiana operations, Roche will fish from a rich pool of talent. Last fall, Indiana University created a life-science incubator to tie together the state’s expanding genomics presence.

“Without a life science incubator in the past, Indiana University has had no way of transforming its research into projects,” the school said. “Now, university scientists and researchers can stay home to find the help and potential funding they need to grow.”

The 55,000-square-foot facility, co-purchased by the school’s Advanced Research and Technology Institute and dubbed the Emerging Technologies Center, will have access to the Indiana Genomics Initiative, the Indiana University Medical School, and the Indiana Proteomics Consortium.

This isn’t to say Roche will have its pick of the life-science litter. Two weeks ago, the Indiana Genomics Consortium won a $50 million award from the Lilly Endowment. That prize, which will help recruit additional researchers, adds to the $105 million the pharma company outlaid to launch the program at Indiana University three years ago.

Craig Brater, dean of the IU School of Medicine, said the new grant would help grow research space for the INGEN initiative on IU’s Indianapolis campus. “The individuals we are recruiting are highly sought after and one of the deciding issues for any good researcher is the quality and amount of lab space available to them,” he said.

The initial INGEN grant from Lilly brought 23 new researchers to the Indianapolis and Bloomington campuses of IU, and the university estimates that the initiative has helped attract an additional $32 million in new research grants, with $36 million more in grant applications currently under review.

Analysis conducted in 2000 by the Battelle Memorial Institute projected INGEN would create 500 basic genomics jobs in Indiana by 2005, among them 74 within the university, 127 in biotechnology firms, and nearly 300 throughout the rest of the state’s economy.

— KL

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