The restructuring of Big Pharma's pipeline activities around the world is fueling an R&D building boom in the U.S. According to McGraw-Hill, construction starts overall were down three percent in the first 10 months of the year. But the building pace for the manufacturer-owned lab sector doubled during the same stretch, reports the Wall Street Journal.
The Journal uses Pfizer ($PFE) as its lead example, citing its 180,000-square-foot facility now being built in Boston. Like others, Pfizer is relocating R&D workers to a select few hubs like Boston and San Francisco which boast top academic investigators as well as rival drug developers. Boston now has a total of 1.7 million square feet of biotech space under construction, with Biogen Idec ($BIIB) playing one of the lead roles. And the Bay Area has seen new growth as well.
"The micro environment really matters," Rod MacKenzie, chief of Pfizer PharmaTherapeutics R&D, tells the Journal. "It really is helpful if you are right next door to scientists and other institutions."
Jones Lang LaSalle crunched the numbers and came up with the top three U.S. growth areas for biotech: Boston, New York/New Jersey and the Bay Area.
For biotech blogger and Atlas Venture partner Bruce Booth, the market for Cambridge/Boston lab space may be a little too hot for smaller developers to handle. Facing the highest lab rental rates in the country, biotechs might want to consider locating in the 'burbs, where they can save some serious money. "Within the Boston metro market today, where everything is within a 30 minute drive," writes Booth, "one would need to have a strong set of strategic reasons (like being next to very active founders at MIT/Harvard) to eat the differential costs of say 20K feet of space in Cambridge vs Waltham/Lexington."
San Diego, always among the most frequently cited biotech hubs in the country, is notable for its absence from the list of top hubs. The hometown newspaper noted that the southern California hot spot has seen venture funding cool significantly in the past year, with San Diego sliding to 10th place in terms of venture funding.