Stories of Technology, Innovation, & Entrepreneurship in the Southeast

Knoxville Business News Tennessee Mountain Scenery Background
November 07, 2016 | Tom Ballard

Site selector offers insights into big pharma decisions at “LST|CON” event

LST-CONBy Tom Ballard, Chief Alliance Officer, PYA

Attendees at last week’s “LST|CON,” the annual conference of Life Science Tennessee, gained some great insights into the site selection process in what is a growing high wage sector in the Volunteer State.

Andrew Shapiro, a Managing Director at Biggins Lacy Shapiro & Company, said his firm has “developed a bit of a specialty in this area. We advise large pharma companies . . . those looking for a location.” The boutique firm has offices in Chicago, New York City, and Princeton, NJ.

Shapiro was part of a panel, titled “Economic Development: Tennessee’s Life Science Advantage,” that Ted Townsend, Chief Operating Officer of the Tennessee Department of Economic and Community Development, moderated. Other panelists were Charlie Brock, President and Chief Executive Officer of Launch Tennessee, and Paul Ulanch, Executive Director of the North Carolina Biotechnology Crop Commercialization Center.

Noting that 1,700 Tennessee enterprises employ about 51,000 people in the life science sector including 10,000 jobs in medical devices alone, Townsend said those jobs are “really dispersed across the state, even in some of our more rural counties.”

Some of the more interesting insights that Shapiro offered related to the changing landscape for his firm’s clients. They are under growing fiscal challenges due to earnings declines as a result of drugs going off patent, rising operating costs like rent, and overall pricing pressures.

“Our clients want to locate near smaller companies,” he explained in highlighting a shifting landscape. Such changes would allow them to collaborate better and even find acquisition candidates. Those location decisions, however, involve many factors such as a critical mass of similar companies.

To bring the location decision considerations home, Townsend asked Shapiro about a decision made by Bristol-Myers Squibb more than three years ago to locate its first “North America Capability Center” in Tampa. Nashville was one of eight cities in the running before the list was cut to three locations.

Shapiro said Nashville had many attributes, such as two great medical schools, but the city was seen by the client as a healthcare center, not a biotech center. Among the deficiencies he cited were too few labs.

In terms of the types of projects Biggins Lacy Shapiro & Company handles, Shapiro listed four – discovery, development, manufacturing, and headquarters with a varied mix of functions in the latter category.

As you might imagine, discovery includes all early research. He said decisions are made around items like the number of well-funded labs, “research-astute tech transfer offices,” quality of life, and talent availability.

Decisions about development projects center around the availability of a cluster of Contract Research Organizations (CROs) and Clinical Services Organizations (CSOs) for drug trials, several medical schools and teaching hospitals, a skilled workforce, and other biopharma companies.

In the case of manufacturing, Shapiro said many decisions are cost-driven, but also are made based on a robust cluster of regulated industries in the community even if they are not in the biopharma space. Other factors include the always important talent requirement, an available supply chain, and a community that understands the sector and has recruited similar companies.

Finally, Shapiro noted that big pharma is moving away from the traditional model for headquarters decisions and more to a shared services type of operation.

Like what you've read?

Forward to a friend!

Don’t Miss Out on the Southeast’s Latest Entrepreneurial, Business, & Tech News!

Sign-up to get the Teknovation Newsletter in your inbox each morning!

  • This field is for validation purposes and should be left unchanged.

No, thanks!