BIO 2004 in San Francisco drew more than 16,000 attendees that included representatives from 61 countries and 41 U.S. states. In the exhibit hall, 28 state pavilions and 31 international pavilions were among the nearly 1,500 displays. And through all of this, Pennsylvania garnered great attention with its message that the Commonwealth is a world leader in the biosciences.

What made Pennsylvania stand out among the many states vying for a biosciences cluster is the sheer power of our existing community. It was abundantly clear that the Commonwealth is one of the only locations with strengths along the continuum of the biosciences. In the Pennsylvania Pavilion alone, attendees saw the world-class research institutions, emerging companies, mature companies and the global pharmaceutical companies that provide the foundation for our continued growth (visit our website for the list of exhibitors http://www.pennsylvaniabio.org/bio0405/default.asp). It was an impressive display. Added to this were numerous company and research experts from Pennsylvania who spoke on panels during the conference. And the support our state government gives to this industry was felt and sent a clear message that Pennsylvania is a great location for the biosciences.

Many distinct advantages position Pennsylvania as a global leader, and set the Commonwealth apart from other states that need to build or attract industry:

• A location in the heart of the bio-pharma corridor—80% of the world’s global pharmaceutical companies are within a 50-mile radius of Philadelphia—providing access to a deep talent pool and partners for our region’s biotechnology companies;
• World-class academic/research institutions that garner substantial NIH funding;
• A location within an hour’s train ride to world’s financial center in New York City and two hours to the U.S. regulatory center in Washington, DC;
• Easiest springboard in the U.S. to the European markets;
• High quality of life for families and a competitive cost of doing business;
• A strong heritage of innovation;
• Strong allied skills—ancillary industries and a robust service provider network that support the growth of the industry.

Pennsylvania Bio State of the Industry Report

At BIO 2004, Pennsylvania Bio unveiled our state-of-the-industry report, detailing the size, scope and wages of the biosciences community in Pennsylvania, including biotechnology, pharmaceutical, device and diagnostic companies as well as other directly related companies. This is an important report for us for many reasons. First, it set a definition based on the North American Industry Classification System (NAICS) that will give us a replicable methodology to track future growth. It also gives us a baseline for future comparisons. The report is available on our website (www.pennsylvaniabio.org).

The report reinforces the message that this industry will play a leading role in the economic future of Pennsylvania. Pennsylvania’s bioscience industry is stronger than ever, with:

• 83,860 jobs
• $5.5 billion in total wages
• 2,038 establishments
• An average employee salary of $65,060.

The last report on the industry was in 1998 and the data was based on the now out-of-use Standard Industry Codes (SICs). Because Pennsylvania Bio used data for the new report based on the new NAICS, it is difficult to draw one-to-one comparisons for growth, but a cursory look shows there is no doubt that significant growth has occurred:

	1998	2002	% Growth
Employment	59,000	83,860	42%
Total Wages	$3 billion	$5.456 billion	82%
Average Annual Wage	$52,250	$65,060	25%
Establishments	1,100	2,038	85%

What is truly remarkable in the study is the level of activity that is happening across Pennsylvania. We have a state that covers a large geographical area. It would not be surprising to find that just one metropolitan area, as with many other states, constitutes the whole biosciences cluster. But this is just not the case in Pennsylvania. The Philadelphia and Pittsburgh regions are hotbeds of activity. And counties throughout the Central Pennsylvania region are emerging with significant growth. The report gives an overview of the employment, establishments and total wages in the regions, and Pennsylvania Bio is working with the three regional greenhouses in Pennsylvania to do a more detailed breakdown of county activity.

The report singles out two sub-sectors that will fuel continuing growth: bio-pharmaceuticals (companies engaged in the research, discovery and development of therapies) and devices and diagnostics.

Bio-Pharmaceutical Sector

From 2001 to 2002, within the bio-pharmaceutical sector:

• Employment grew more than 5% (compared with 4.5% nationally), to 27,121 employees;
• The number of establishments increased nearly 1%, to 124 establishments; and
• Total sector wages grew more than 6%, now totaling $2.2 billion with an average annual wage of $80,885.

Medical Devices and Diagnostics

In the device and diagnostics sector, Pennsylvania boasts:

• 330 establishments
• 18,024 employees
• Total annual wages of $808 million.

The percentage wage growth in the device and diagnostic sector is well outpacing the national average: 5.2% average annual wage growth in Pennsylvania versus 2.8% growth in the U.S, and total sector wage growth reached 6.7% in Pennsylvania versus 1.6% nationally.

Venture Investment

Venture investment fell from 2001-2002, and Pennsylvania felt it, as did most sectors in the nation. However, venture deals began to rebound for the biosciences in Pennsylvania between 2002 and 2003. And in the first quarter of 2004, deals came to life with more than $150 million in investments for Pennsylvania’s bioscience community.

This upswing was led by large deals for:

Eximias Pharmaceutical Corporation     $63.5 million
Nucleonics, Inc.                                  $40.9 million
BioRexis Pharmaceutical Corporation    $30 million
Morphotek                                          $11.4 million

Basic Research

A quick measure of the level of research activity is the awards research institutions in the state receive through the National Institutes of Health (NIH). Pennsylvania excels in this. Fourth in the nation, Pennsylvania institutions received $1.3 billion in NIH funding in 2003, and two universities—the University of Pennsylvania and the University of Pittsburgh—were in the top ten nationally.

But this is just one measure of research investment. Stay tuned for a report later this year that Pennsylvania Bio will release on private company R&D investment. With such a significant community of pharmaceutical and biotechnology companies, the amount that the industry invests in research and development activity will, no doubt, be impressive.

BIO 2005

BIO 2004 was a great venue for Pennsylvania to showcase its strengths, but at BIO 2005 in Philadelphia, Pennsylvania will truly take center stage with nearly 20,000 professionals from around the world expected to be in attendance. We have the opportunity to put on display the full continuum of the biosciences in Pennsylvania and showcase the companies, research institutions and supporting organizations that make us a world-class community. Over the next months, you’ll be hearing more about the preparations for BIO 2005, we hope you will plan to take part in it.