Location, Location, Location: A Regional Look at 2008 Pharmaceutical-Biotech Capital Investment Plans

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Reported by Annette Kreuger, Industrial Info Resources (Sugar Land, Texas)--It goes without saying that the site-selection process is an essential component to industry planners. A number of things are to be considered before committing to a specific location, ranging from the speed of the permit approval process to offered financial incentives. Planners must also consider the availability and qualifications of potential employees. It is becoming increasingly evident that every major market region is prepared to partake of its own portion of the lucrative pharma-bio project pie.

Click on the image at right to view 2008 North American Pharma-Biotech Industry Project Starts Chart.

Summarized below, as reported in Industrial Info's newly released 2008 Pharmaceutical & Biotech Industry Outlook, each region is enjoying its own level of success in attracting the industry's capital investments. While some have consistently been at the forefront, such as the Mid-Atlantic and Northeast, other areas, including the Rocky Mountains and Arizona, are emerging as serious players in the site-selection sweepstakes. All data discussed and analyzed were drawn from a recent survey of current reported projects contained within Industrial Info's Pharmaceutical Tracker.

Great Lakes

The Great Lakes continues to hone its ability to attract capital investment dollars. With a light uptick from 2007, the region is forecast to launch $2.2 billion in capital and maintenance projects. The 86 projects scheduled to begin within the next 12 months boast an average total investment value (TIV) of $25.5 million. As in previous years, the projects include regularly scheduled maintenance programs up to grassroot construction. Two of the largest projects set to launch in 2008 are Medco's $150 million grassroot pharma distribution center in Whitestown, Indiana, and the University of Wisconsin's $150 million Biomedical Discovery Center in Madison.

Mid-Atlantic

The Mid-Atlantic region continues to expand its reputation as a magnet for life science investment, as it sets to begin $3.1 billion in capital and maintenance projects. With 67 projects, the average project total investment value (TIV) in the region is $46.2 million. Home to some of the industry's major manufacturing campuses, the region boasts a heavy federal research influence, as well. The largest of the projects set to begin this year is the $750 million U.S. Army Medical Research Institute of Infectious Disease at the Fort Detrick base in Frederick, Maryland. Not far away, AstraZeneca's division Medimmune may also proceed this year with the $250 million second phase expansion of its manufacturing campus in Frederick.

Midwest

Within the 12 months of 2008, the Midwest region expects to begin construction on $977 million worth of active projects. This is almost dead-on with the 2007 forecast and the dollars are divided among 49 projects. This translates into a project average TIV of $20.2 million. Iowa and Nebraska have landed the region's two largest projects for 2008. The University of Iowa is scheduled to begin construction on the $120 million Institute for Biomedical Discovery, and the University of Nebraska could begin its $85 million Research Center of Excellence III this year.

New England

New England continues to land huge manufacturing projects. Case in point is Shire's proposed $394 million plant in Lexington, Massachusetts. The region is expecting 38 projects representing a total TIV of $2.3 billion for 2008. This averages out to an impressive $60.5 million each. Still smarting from the loss of Novartis' $750 million "Project Magellan" biomanufacturing project to Singapore, the region actively courts investment with strong incentive proposals. Boston remains a leader in attracting industry investment and is the site of where Alexandria Real Estate Equities plans to begin the $350 million Life Science Center this year.

Northeast

The Northeast region has almost doubled its projected capital investment for 2008 from last year. The region anticipates 64 projects worth $2.6 billion to begin construction this year. Carrying an average TIV of $40.3 million, the projects range from the massive $300 million Corning research project in Corning, New York, to the $1 million plan to shut down Enzon's facility in South Plainfield, New Jersey. After final funding is awarded, New Jersey plans to kick off construction on the long-awaited $150 million Stem Cell Research Institute in New Brunswick.

Rocky Mountains

The path has smoothed out quite a bit in the Rocky Mountain region which has more than double the planned activity for 2008 over last year. Jumping up to $1.9 billion worth of project starts, the bounty is spread over 37 projects. Carrying an average TIV of $51.3 million, industry spending underscores the trajectory of growth the region as a whole is experiencing. Utah currently claims the region's two largest 2008 projects, one being the $200 million Fresenius expansion to produce dialysis products in Ogden. The other is the University of Utah's plans to begin a $150 million Neuroscience and Biomedical Center in Salt Lake City. Arizona remains a hotbed of industry activity, with Arizona State set to begin its $142 million Interdisciplinary Science and Tech Building IV this year in Tempe.

Southeast Region

The Southeast region boasts 73 projects valued at $2.6 billion to begin in 2008. Almost doubling the 2007 figures, this year's projections put the region at a project average TIV of $36.1 million. While activity in Puerto Rico has slowed to a veritable trickle, the region is busy in the majority of its states. The largest project set to begin this year is Emory University's $365 million Clinical and Research Building in Atlanta. The entire region and Birmingham, Alabama, in particular, rejoiced when Solvay named the city as its choice for a $350 million vaccine production plant. Florida continues to bolster its strength in landing expansive research institutes and expects construction of the $150 million Moffitt/Merck joint venture M2Gen Research center to begin this year in Tampa.

West Coast

The West Coast continues its trend to grow its industry investment each year, with the 2008 easily eclipsing the 2007 figures. The region expects 65 projects carrying a TIV of $3.48 million to get underway this year. This translates into a project average TIV of $53.6 million. One of the largest projects that could begin this year is the Salk Institute's controversial $350 million plan to expand its historic campus in La Jolla. Looking across the Pacific, the University of Hawaii is poised to begin construction of the $250 million cancer research center in Honolulu's Kakaako area. Bothell, Washington, breathed a sigh of relief following the Icos sale to CMC last year, which in turn announced plans to invest $50 million to expand the CMO plant it acquired from the sale.

Canada

Down a bit from 2007, Canada anticipates $730 million in 2008 project starts spread over 45 projects. Carrying an average project TIV of $16.2 million, the projects are sourced from both the public and private sectors. Regionally, Ontario claims the most project starts for 2008, with 19 projects valued at $252 million scheduled to begin. From a TIV standpoint, Western Canada is the leader, with $272 million in project starts spread over just seven projects. The largest current 2008 project in Canada is the planned $250 million Academic Health Sciences Wing D in Saskatoon by the University of Saskatchewan. Back east, the University of Waterloo hopes to break ground on its $72 million Quantum Nanotech research building in Ontario this year, having failed to do so in 2007.

Industrial Info Resources (IIR) is a marketing information service specializing in industrial process and energy related industries with products and services ranging from industry news, forecasting, plant and project databases, as well as multimedia advertising campaign assistance.