NAVIGATION
New York State has an impressive history and a long tradition of leading the nation in industry, innovation, and growth. The role of NYS in the Life Sciences is no exception.
New York State has served as home to many high profile life science companies, colleges, and research institutions. Even before Charles Darwin published Origin of the Species, Pfizer was founded in New York. Other significant companies such as Bristol Myers, The National Institutes of Health, Roswell Park Cancer Institute, Genentech (now Roche), OSI Pharmaceuticals, and Regeneron were all founded in New York.
The latest figures tell us that New York State has:
- 9 world class research institutions
- 60 academic/research institutions
- Over 200 biotech organizations
- 26 medical centers
- 175 hospitals
- Over 30 pharmaceutical companies
Currently, New York State ranks 2nd in the nation in the total research and development investment and 3rd in biotech behind California and Massachusetts.
In the past decade, New York State has consistently ranked nationally in the Life Sciences arena, including:
- “1st in the nation as top state for biotech growth
- 2nd in the nation for total bioscience employment with 92,221 employees
- 3rd in the nation in number of grant awards provided to research institutions
- 2nd in the nation in number of advanced science and engineering degrees
- 3rd in the nation in total higher education degrees in biological sciences”
New York State also has an impressive history of supporting the biotech industry through the following programs:
- NYSTAR – The State is home to Strategically Targeted Academic Research (STAR) Centers which are state funded. With this funding, the centers were provided the physical and intellectual infrastructure to enable development of breakout science and technology. The following centers are a part of the NYSTAR program:
o Advanced Research Centers (ARCs) – World class research exists at 5 ARCs in NY.
o Center for Advanced Technology (CATS) – 15 CATS in NY assist in transferring technology from research universities into commercial products.
o Regional Technology Development Centers (RTDCs) – 10 not-for-profit organizations use three programs to support businesses with business information, financing and venture capital information, and Federal research grants.
o Centers of Excellence – There are nine initiatives through which companies may secure research funding.
- Gen*NY*sis Program (Generating Employment through New York State Science) – This program provided the industry with $225 million, focusing on all stages of the life sciences business models, from research and development to licensing and production.
- NYSTEM (Empire State Stem Cell Trust Fund) – This program has invested in over $160 million since its foundation in 2008.
The news for residents of NYS involved in this market gets better and better!
Representatives of New York State government have made it clear that they are not satisfied with the 3rd place national ranking for the biotech industry.
In April, 2011, the 20th annual meeting of the New York Biotechnology Association (NYBA), one of the many biotech supporting groups in New York, hosted a panel called:
“The Global Struggle for the Biopharmaceutical Industry: New York Must Step Up Its Game!”
At the two day event, executives discussed both the initiatives and challenges that the State faces in the biotech industry. The primary challenge is NYS’s tax rates, which are some of the highest business and personal tax rates in the country. This reality poses a real challenge to the ability to attract new companies to the area.
In light of these and other changes, Derek Brand, director of business development for New York Academy of Sciences, remains encouraged. Brand commented (while at the NYBA conference),
“NYC has been recognized as a leader in scientific development for quite some time, with intellectual assets that are on par with any other city in the world. One of the challenges in advancing entrepreneurial bioscience in the region has been the level of interconnectivity between academic scientists and entrepreneurs. Thankfully, this is improving. This meeting is a good example.”
Recently, New York City has taken significant steps toward cultivating a biotech friendly regional environment. In June, 2010, the City announced a $3 million biotechnology tax credit. Under this modification to the tax law, 4 year eligibility for this credit will be applied to small, emerging companies that are engaged in research and development. Companies that meet these requirements will be credited for investments made in facilities, operations, and training.
The tax credit is intended to encourage existing companies to retain operations in the down state region, and encourage new biotech businesses to call New York State their home.
Senator Thomas K. Duane commented;
“The biotechnology tax credit is an effective economic development tool that will harness our unparalleled human intelligence and ingenuity and support the outstanding research and medical facilities that we already have here in New York City. And every time a biotechnology company comes to New York, we gain more than just jobs. We enhance our diverse and highly-educated workforce, we hone our reputation as a center for cutting-edge technology, and we reap the economic benefits of an industry on the rise. This is a win for New York.”
Another objective is renewing and going farther to make the Federal Research and Development Tax Credit permanent. The R&D Tax Credit was first enacted in 1981 and has allowed research companies credits for wages, supplies, and up to 65% of the cost of utilizing external contractors. This credit therefore, supports two industries, manufacturing and consulting.
The Tax credit recently expired, but it is noted that the expiration and renewal cycle has repeated 13 times over the credit’s history. President Obama recently proposed making the R&D Tax Cut permanent, negating the need for ongoing renewal efforts.
The move to make this federal credit permanent also includes expanding and simplifying the current credit.
Realizing these objectives will provide a huge boost to the industry, as it guarantees companies that may be considering NYS a long term financial incentive to establishing operations in the state. Upstate New York is expected to realize the greatest benefits, as it currently is home to more than 200 Bio/Med companies, and offers a significantly lower operating cost than the large urban areas that surround NYC.
The executive leadership of Coda Corp USA are encouraged by these developments and trends. Coda Corp USA’s headquarters is in Monroe County near Rochester, NY with another New York office in Niagara County, near Niagara Falls, NY. The trends show significant growth in the biotech industry in these regions of the state.
A recent study, focusing on the Buffalo-Niagara Falls Metropolitan Statistical Area (MSA), identified historic growth in that region.
The Buffalo-Niagara region ranked 4th in 2009 on the list of the largest market growth; advancing 94 places since 2008.
Also distinguishing the Buffalo-Niagara region is the support of angel investors, which is currently twice the national average. This reality indicates that market researchers and investors believe that these trends will continue.
Currently there are more than 100 angel investors residing in Western New York that could not participate in the angel investment group because the maximum number of allowable investors had been reached.
This is not stopping the region from attracting even more investors. Bright Buffalo Niagara, an organization dedicated to helping “entrepreneurs and innovators to develop their ideas in ways that are attractive to potential investors,” is hosting a workshop titled, “The Power of Angel Investing – An Overview”.
Conclusion
The combination of:
- the facilities and the scale of the work force offered downstate
- the low operating costs and clusters that exist upstate
- Federal and State tax credits and program initiatives and funding
- the vast and ever increasing investments made by the private sector
- the synergistic effect of cluster growth
- the presence of a local consulting workforce
- the presence of all organizations representing all sectors of the Life Science market (pharma, bio-tech, med device, R&D, CRO and CMO)
are clearly resulting in unprecedented growth in the Life Science industries in New York.
This growth will result in increases in local employment, local tax bases, and scientific and medical breakthroughs.
As Coda was founded and continues to be headquartered in New York State, we are eagerly watching the development of the region, and continue our commitment to servicing the companies that contribute to the livelihoods of our neighbors and improve the economic environment of our regions.
References:
1. http://www.newyorklifescience.com/biohistory.htm
2. http://www.esd.ny.gov/International/Data/International_LifeSciences.pdf
3. http://www.nystar.state.ny.us/stars.htm
4. http://www.esd.ny.gov/WhyNewYork/Data/Biotechnology.html
5. http://www.taxpointadvisors.com/?p=360
6. http://www.xconomy.com/new-york/2011/04/08/biotech-in-new-york-scientists-and-entrepreneurs-gather-to-banter-about-the-citys-challenges-and-opportunities/
7. http://www.inc.com/guides/2010/09/how-to-take-advantage-of-the-research-and-development-credit.html
8. http://www.linkedin.com/news?viewArticle=&articleID=139195399&gid=1830614&type=member&item=26302403&articleURL=http%3A%2F%2Fbuffalo.bizjournals.com%2Fbuffalo%2Fstories%2F2010%2F06%2F21%2Fdaily24.html%3Fana%3Dlinkedin&urlhash=Hrzk
9. http://www.nybiosearch.net/results.php?32=1&alpha=all&job_title=00-0000®ions=0&match=all&page=1&submit.x=68&submit.y=13
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