Study: Finding contributions and needs of life sciences industry in New Jersey
Recognizing the continuing evolution of New Jersey’s life sciences industry, BioNJ has released a comprehensive report that documents the ongoing growth of the biotechnology sector in the state and combines and assesses the contributions of the entirety of the life sciences sector to New Jersey’s economy, including employment and economic impact.
With more than 325 members, BioNJ is focused on the growth and prosperity of New Jersey’s life sciences cluster. Founded in 1994 by New Jersey industry CEOs, BioNJ serves as the voice of companies located in New Jersey, seeks to advance their economic growth and development and works to encourage new and established companies from around the world to locate in New Jersey.
BioNJ conducted the study in partnership with EY (formerly known as Ernst & Young) the Edward J. Bloustein School of Planning and Public Policy (Bloustein School) and the New Jersey Department of Labor and Workforce Development’s (LWD) Office of Research and Information.
Significant findings from the study, Life Sciences in New Jersey: Looking Beyond Biotech, include:
• Annual expenditures by the New Jersey life sciences industry are estimated at $30.1 billion
• As of September 15, the number of biotechnology companies operating in the State increased to 379 from the 340 reported in the 2012 EY BioNJ report, representing an increase of 12%
• The life sciences industry directly employs 66,451 people in New Jersey and indirectly supports 146,105 additional jobs through its total expenditures for a total of 212,556 jobs
• New Jersey’s biotech companies overwhelmingly planned to hire more employees in 2014
• While overall life science employment totals, according to the LWD, are down 12.3% from 2007 to 2012—driven by big pharma, which experienced mergers, site closings, patent-cliff-related R&D and sales force cutbacks, and increasing externalization of research—biotechnology was the only therapeutics sector to post employment gains, growing 2.1% through the addition of 856 jobs over the same five-year period
• Wages industry-wide averaged $126,794 in 2012, led by pharmaceuticals ($137,949), followed by biotechnology ($132,576) and medical devices ($94,652). Life sciences average annual average was 118.3% higher than New Jersey’s total private sector average wages of $58,093
• There were 3,042 facilities across all sectors of New Jersey’s life science industry in 2012, up 6.3% from 2007, led by 10.3% growth in the biotechnology component and 9.1% growth in the pharma component
• Total funding of New Jersey life sciences companies spiked in 2013 with approximately $900 million in both early and late-stage investments, according to Venture Source. That represents well over 200% growth over the prior year. Funding was helped by seven New Jersey companies that completed initial public offerings (IPOs) in 2013
• Investment in late-stage commercial companies was robust; early stage venture investment as noted in previous reports lagged behind and was basically flat in 2012.
The BioNJ study recommends actions along several themes: life sciences ecosystem development initiatives; shareholder integration and coordination; tools and databases; policy and funding initiatives; corporate involvement; and marketing, communications and advocacy.
The recommendations include:
• The establishment of a “Life Sciences Ecosystem” that is both geographical and philosophical in nature
• Creating a first-of-its-kind, web-based translational and clinical research collaborative suite to connect experts and key opinion leaders, ongoing trials and industry-sourced clinical opportunities for collaboration
• Continuing to expand upon New Jersey’s current armamentarium of innovative incentives to do more to encourage, leverage and reward investment. To do this, New Jersey should partner with BioNJ, investors and other industry members to develop novel funding vehicles that provide new and different opportunities for capital formation.