Texas is ‘top-tier’ in bioscience industry
Medical research and related fields are giving a lift to state’s economy, report from trade association says
Biotechnology continues to grow in Texas, contributing to the state’s overall economy by adding jobs, making strides in research and innovation and last year attracting $1 billion in federal funding for research, a new report on business development from a biotechnology trade association found.
As the Texas economy struggles under the weight of an oil and gas industry downturn, the biosciences of medical research, treatment innovation and pharmaceutical development are seen as a bright light that stands to soon glow brighter.
The Texas bioscience industry reported 81,000 jobs in 2014 across 4,865 businesses, which translates to 1 percent growth since 2012, according to a report released Tuesday by the Biotechnology Innovation Organization, the national trade association, which compiled the study along with Teconomy Partners to measure growth over previous years.
The findings were made public in San Francisco at the organization’s annual convention, which attracts 15,000 biotechnology and pharmaceutical professionals from around the world.
“Texas is one of the toptier states in the size of its bioscience and biomedical research and innovation base,” the report concluded.
“The stage is set,” agreed Thomas Kowalski, president and CEO of the Austin-based Texas Healthcare and Bioscience Institute.
“Where we are now based on where we were, the growth is phenomenal,” he said in a phone interview from the convention.
Kowalski said proof can be found in his own trade association chapter, which has grown to 4,200 member companies from 500 two decades ago.
Luring JLABS
In that time the state has set its sights on becoming a true competitor with the more established institutions of research and pharmaceuticals on the East and West coasts. “The third coast” has become a popular rallying cry for those working to turn Texas in general and Houston in particular into a bioscience destination.
“Houston is becoming a major player not just from a research perspective but also in its clinical prowess,” said Melinda Richter, head of Johnson & Johnson Innovation JLABS.
JLABS opened a stateof-the-art, 34,000-squarefoot business incubator not far from the Texas Medical Center’s main campus in March. The project offers laboratory space, equipment and guidance for biotechnology and life science startups in their march toward commercialization.
The luring of a JLABS facility was seen as a coup not only for the innovation expected to blossom there but also for bragging rights.
“That is huge,” Kowalski said of the opening of JLABS @ TMC. “They don’t just go anywhere.”
Nationally, biotechnology exploded in the early 2000s but slowed during the recession years. The report says the industry is now regaining lost ground.
In 2014, the industry employed 1.66 million people at more than 77,000 businesses across the country, the report found. Wages continue to be robust with a $95,000 average annual salary.
The industry’s growth in Texas can also be measured by the sheer number of bioscience patents issued. There were 1,196 last year, up from 980 just three years before. The highest number of patents came from medical and surgical devices and pharmaceutical development.
But more than economic growth, the report lauds the role biotechnology has had on medical outcomes. For example Hepatitis C, once considered incurable, now has a cure rate of more than 90 percent because of treatment advancements. It is also estimated that for children born in the past 20 years, better vaccines have prevented 730,000 early deaths. In addition, the five-year survival rate for certain types of leukemia has grown from 41 percent in the 1970s to 70 percent in recent years.
‘Best-kept secret’
In Texas, the state’s research universities conducted an estimated $3 billion in academic research and development in 2014. Funding from the National Institutes of Health to Texas Institutions reached $1 billion last year, the study found.
“This is one of the bestkept secrets,” William McKeon, executive vice president and chief strategy and development officer for the Texas Medical Center, said about the volume of medical research now happening just within the Medical Center.
He said another testament of an industry on the cusp is the ongoing recruitment of a staggering amount of brainpower, pulling medical and research talent from august, big-name institutions worldwide. McKeon came to TMC in 2013 from heading a medical device company in London.
While acknowledging the growth remains small when stacked up against other industries, he predicts biosciences will continue to be in the state’s mix of opportunities. He sees more migration to Texas from the coasts as those places become “saturated.”
While biotechnology is and may always be in the shadow of the oil and gas industry in Texas, McKeon points to the 10,000 job openings at the Texas Medical Center alone.
“We never get close to filling them,” he says.
Richter, too, sees a certain lifeline in a region hit hard by the energy collapse.
“This is a classic transition away from an economy that is subject to variables that see it go up and down,” she said. “You have to create these new economies.”