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September 25, 2002
Some biotech firms bypass Cambridge for
the suburbs By
Peter Demarco When Swiss giant Novartis Pharmaceuticals decided to relocate its research headquarters, the natural choice was Cambridge, one of the world's leading biotechnology centers.
Instead, he chose the Cummings Center in Beverly, where rents are a fraction of what they are in Cambridge, there's ample parking, less traffic, and room to expand. ''The rents in Cambridge are $70 a foot. The rents here are $20,'' said Salzman, CEO and founder of Inotek Pharmaceuticals. ''With the Internet, I'm in communication with Hong Kong, New Zealand and Europe every hour. Whether I'm 30 minutes from Boston is irrelevant for 99 percent of my collaborations.'' The majority of biotech and biopharmaceutical firms still follow the path taken by Novartis, not Salzman. By one industry specialist's estimate, at least 75 percent of Massachusetts biotechs are located within a few miles of Harvard University, the Massachusetts Institute of Technology, the Whitehead Institute, and Massachusetts General Hospital. Internet or not, nothing beats being able to literally stroll across the street to close a business deal, or the ability to invite a promising post-doctoral student to stop by the lab on his walk home to Central Square. A Cambridge address is still a valuable marketing tool, too. ''The safe thing for an executive is to go to Cambridge and spend the money,'' said one biotech real estate broker. ''He wants to make sure that if something doesn't go right, no one can say it was because he wasn't in Cambridge.'' But while opening up shop in the suburbs has its risks - and may sound less glamorous - more and more companies are taking the gamble. Cummings Properties leases space to more than 30 biotech and biopharmaceutical firms (protein and gene shops as opposed to medical device-makers) at facilities in Beverly, Woburn, and Medford. The Davis Cos. are marketing Waltham's Polaroid campus as a biotech haven, with four or five companies inquiring about space this month alone, according to company president Paul Marcus. Cubist Pharmaceuticals skipped out of Cambridge one year ago for new digs in Lexington; EMD Pharmaceuticals, known locally as Lexigen, just built a $50 million complex on the Billerica/Bedford line; even Genzyme has expanded its manufacturing facilities in Framingham. For some firms, particularly start-ups with grand plans for expansion, cost is the main reason for picking Sharon or Waltham over Kendall Square. Pravin Chaturvedi, founder of Scion Pharmaceuticals of Boston Avenue in Medford, said he's paying half of what he would in Cambridge yet has enough space to double his work force. Dennis Clarke, president of Cummings Properties, said his firm in recent years has catered to dozens of start-ups such as Scion that don't mind moving into less-than-perfect but inexpensive spaces made available by the downfall of the telecommunications industry. ''They need a facility fast - a turnkey facility. But often they don't have the capital to build one,'' he said. ''We have our own designers and can self-finance. We build the labs for them.'' Cubist, an MIT spinoff, began in 1992 with a single lab on Emily Street. By 2001, the company had taken over two more buildings and was looking to grow again - but not in Cambridge. Instead, Cubist purchased a former W.R. Grace facility in Lexington, catapulting its square footage from 55,000 to 88,000. ''We were a little disjointed in Cambridge because of the physical space. We needed to be under one roof,'' said Jennifer LaVin, senior director of corporate communications. ''And all available land in Cambridge is gone.'' Marcus, of the Davis Cos., said maturing biotech firms such as Cubist that have graduated from the incubator stage to the corporate level and are gearing up for product manufacturing are natural candidates to migrate to the wide-open suburbs. More mature firms also tend to have older employees - including the boss - who have started families in the suburbs and don't necessarily crave Cambridge's active night life or chic restaurants like they did when they were in their 20s, several said. ''Is the commute to Cambridge wearing down your scientific passion?'' asks a recent job advertisement by EMD Pharmaceuticals of Bedford. Yes, answered Ted Kurowski of Wilmington, who left his longtime laboratory job in the city to become EMD's safety manager about a year ago. ''I used to try to get to work at 6 a.m., and I'd still get stuck on the lower deck. That sort of blew my mind,'' he said. ''Now, my commute is 12 minutes, at most. It's a great trade-off. And my salary is better.'' ''Cambridge has a cachet,'' said Louise Firth, a director at Tiax technology consulting, ''but it's out of space, and it's a tough commute.'' Stephen Mulloney, communications director for the Massachusetts Biotech Council, said most biotech and biopharmaceutical firms don't venture beyond the Route 128 belt, with the notable exception of a handful that have gravitated to the Worcester Biotechnology Park, located across the street from the University of Massachusetts Memorial Medical Center in Worcester. Even within Route 128, some communities are more ''biotech friendly'' than others in that they offer tax incentives or have technical expertise in zoning or health code issues pertaining to biotechs, he said. While Michael Lytton, a general partner at Oxford Bioscience Partners, a Boston venture capital firm, said ''it's completely irrelevant'' whether firms locate in Cambridge nowadays, most agree that biotechs still need to be within arm's reach of Cambridge because so much business transpires there. ''The decision here was, `OK, we're near enough,''' said Sunny Uberoi of Antigenics, which established a cancer-vaccine factory in Woburn four years ago. ''If people believe in the technology, they'll come to Antigenics. We don't have the posh location, but we have the product.'' Brian McKernan, 36, CEO of 2-year-old Agencourt Bioscience, which performs genetics research for larger firms from its Beverly offices, agreed. ''We can produce products just as well here in Beverly as in Cambridge,'' he said. ''Certainly the big companies have the financial heft to locate in Cambridge, and there's some appeal to being down there in the midst of these tremendously bright individuals. But from our standpoint, we can still get that. And here, we pay a lot less.''
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