NJ Biotechnology Industry Survey Sees Growth and Maturity

Business Wire, June 30, 2008

Number of New Jersey Companies Continues to Increase

Increases Also Seen in Employees, R&D Spending and Revenues; Early-Stage Funding Remains an Issue

TRENTON, N.J. -- New Jersey's biotechnology industry continued to both grow and mature in 2007, according to the latest BioNJ industry survey. The industry expanded as measured by several important factors, with the number of public and private companies located in the State increasing beyond 2005 levels, while public companies experienced growth in the number of employees, revenues, research and development expenditures and market cap, according to New Jersey Life SciencesOWhere Science is Life, a survey released today by BioNJ with assistance from Ernst & Young.

Among the highlights, the survey reported that:

* The number of companies operating in the State increased to 238 in 2008 from 226 in 2006 despite a trend toward mergers and acquisitions.

* The number of employees working at public companies at the end of 2007 was estimated at 6,155, representing an increase of 5 percent over the 2005 level of 5,824 employees.

* Eighty-six percent of the surveyed companies expect to hire on average an additional 20 employees in the next 12 months.

* R&D expenditures at public companies in 2007 were $1.2 billion compared to the $737 million spent in 2005.

* Funding for early-stage research remains an issue because it is still difficult to obtain. This is true industry-wide.

* New Jersey's 32 public companies in 2007 generated revenues in excess of $3.2 billion, an increase of 113 percent from 2005. As one example, revenues for Celgene Corporation topped $1.4 billion in 2007, a 161 percent increase from 2005.

* Revenues for both public and private companies were estimated to be well above $5 billion.

* The aggregate market cap of public companies in the State at the end of 2007 was $29.7 billion, compared to $16.9 million at the end of 2005.

"Despite disruptions in the credit markets and corresponding volatility in the equity markets, New Jersey's biotechnology industry is increasing significantly and could be one of the biggest drivers of employment and economic growth in the State going forward," said Michael D. Becker, President and CEO of VioQuest Pharmaceuticals and BioNJ Chairman. "Life sciences in general, and New Jersey's firms in particular, continue to be a hotbed for investment along with merger and acquisition activity - after all, disease is relentless in both good economic times and bad. However, although the biotechnology industry is a significant and growing component of the States' economy, in view of increasing economic and regulatory pressure and political dynamics, the future prosperity of the industry and the State will rely on a concerted commitment to promote the growth of this industry and forge stronger partnerships between the public and private sectors."

Fundamentals for a Robust Industry

Conducted during the spring of 2008, the goal of the survey is to identify trends that point to industry strengths and what can be done to improve the industry in the future. Key trends as identified through survey respondents included strong and fundamentally sound science as demonstrated by both the variety of compounds in development and the continued strength of the licensing activity, a belief that New Jersey has the scientific talent needed to commercialize and manage current research and development projects and that companies expect to continue to hire more employees.

According to the survey, 86 percent of those surveyed said they expected to hire an additional 20 people within the next twelve months. In 2005, 86 percent of responding companies reported that they expected to hire 13 additional employees over a 12-month period.

The number of New Jersey's biotechnology and life sciences companies are growing rapidly with the number of startup, small, mid-size and fully integrated companies tripling in the past decade.

"As this survey demonstrates, with each year, New Jersey's growing biotechnology industry becomes even more important to the State's social and economic viability," said Angie McGuire, Acting Chief of the Office of Economic Growth. "Recognizing this, our Economic Growth Strategy includes a significant emphasis on attracting and helping biotechnology companies to grow and prosper, which will help New Jersey maintain its position as a leader in the life sciences."

State Programs Continue to Support Industry Growth

With the fourth largest public company cluster, New Jersey remains a "hotbed" for biotechnology. In responding to questions that look at why companies locate and remain in New Jersey, a total of 96 percent of responding companies indicated that there are sufficient managerial personnel and 88 percent believe there is sufficient scientific personnel to meet their needs.

The overwhelming majority, 74 percent, also believe that there is opportunity for strategic collaborations with academic institutions and other industry laboratories within the State.

Sixty-one percent of the respondents also indicated that New Jersey State Government provides an environment that supports and promotes the industry; a measure that has increased with each survey since 2003.