How to grow biotech R&D jobs in Massachusetts

The $1 billion initiative launched in 2008 to grow the state’s cluster of life science companies has been widely credited with cataputing the state to the top spot on the list of the world’s biggest biotech hubs. But if there’s one criticism to which the initiative has been vulnerable to, it’s in the number of jobs its since created. According to most measures, those figures have not lived up to initial estimates.

Now, as the 10-year term of the Massachusetts Life Sciences Center winds down, efforts are underway to create new legislation which would extend the tax breaks and other perks used to foster growth in the industry. And at least one of those efforts aims to take a more realistic view of where the jobs are in biotech — a field which is known for companies such as Biogen (Nasdaq: BIIB), which employs 7,500 people but are worth more in market value than companies with many times more employees.

“This is an industry that hires a modest amount of people who are paid very well,” said Ed Price, president of Newburyport-based contract research organization, PCI Synthesis who is urging a new way to promote growth in the state’s life science industry beyond biotechs and pharmaceutical companies.

To state the obvious, job growth matters. It’s the most direct way by which the state measures the tangible benefits of the millions of dollars of taxpayer money being spent to build up the sector. It’s also one of the main ways former Gov. Deval Patrick sold us all on his plan back in 2007, by suggesting that it would create 250,000 new jobs over the next decade. Even counting last week’s news that 2014 saw the biggest jump in biopharma jobs since 2008, the rosiest of estimates put the state’s total job growth to about 14,000 six years into the MLSC (I wrote extensively about the disputes over job growth numbers in April).

Price and Jeff Kiplinger, founder of Marlborough-based CRO Averica Discovery Services, are pushing to have contract research and manufacturing organizations (CROs and CMOs) as well as academic or nonprofit entities that conduct research for biotech firms, included in any extension to the MLSC. (Note: the two are also co-chairs of New England CRO/CMO Council, and wrote a recent op-ed piece in the Boston Business Journal). As a first step, the two are talking to the state’s biotech industry group, MassBio, about surveying local biotech leaders about where they are outsourcing their research and manufacturing work now.

They argue that changes in the biotech business model over the past several years have shifted much of the growth in employment in biotech. Massachusetts is now home to more than 225 CROs and CMOs that employ more than 16,000 people in the state, they say, representing a quarter of the R&D employment. Price contends that most of the work his 125-employee CRO does is to serve Kendall Square biotechs, enabling them to avoid hiring dozens of their own researchers.

But Price and Kiplinger say existing incentives don’t target areas the encourage growth in-state, since many local biotechs are paying out-of-state firms or universities to do their research.

Contacted for this story, Angus McQuilken, vice president for communications and marketing at the MLSC, said CROs and CMOs are “an important and growing part of our life sciences community.”

“Many of these companies are already taking advantage of MLSC’s funding programs, and we are always open to additional ideas for how we can support their continued growth,” he said.

Price and Kiplinger envision a way in which incentives offered to biotech — as well the companies that serve them — would be offset by the growth in the state’s economy that results from those incentives. Asked for a concrete example, they suggested that local biotechs that contract their research or manufacturing might be given incentives for using Massachsetts-based firms. That would keep the dollars in the state, and could ultimately lead to greater job growth to benefit the economy.

“We’re not advocating that we do another billion-dollar spend here,” said Price. “But we’re advocating a system that’s self-sustaining.”