Biotech Values

[Biowatch]

LLY has reduced U.S. workforce 8% since 2005, to 22,000 in Jan 2007
SGP 1,100 jobs 6/2/2006

Plus, look at any biotech that's hit an FDA roadblock lately:

OSIP cuts retirees healthcare plan 7/30/07 #msg-21681183
divests Eyetech http://biz.yahoo.com/bw/070727/20070727005511.html?.v=1
POTP lays off top management team 7/27/2007 #msg-21624972
60% cut 5/31/07 #msg-20090504
DNDN lays off marketing, etc. 40 jobs (15% of employees) 5/17/2007
34 jobs 1/19/06
GENR 13 jobs (30% of employees) 4/10/07
RNVS 40% cut, leaving 70 employees1/23/07
TELK 25% cut 2/13/07
GNTA 34 jobs (35%) 12/20/06
COLY 33 jobs (25%) 1/22/07
ASPV 33 jobs (25%) 7/25/07
ENCY 150 jobs (70%) 6/25/07
HEPH (25%) 4/27/07
CRA 184 jobs (~33%) 1/10/06
NABI 33 jobs (5%) 7/23/07
LGND 267 jobs (76%) 2/1/07
AVN (16%) 9/9/06
TGEN 26 jobs (27%) 1/25/06 (probably more cuts will follow after recent death in trial)
NEOL 14 jobs (20%) 12/27/06
22 jobs (23%) 4/28/2006
EPIX ~48 jobs (50%) January 2006

Misc. stories:
Shortage Of Talent A Critical Condition For Pharma, Biotech
July 13, 2007: 08:05 PM EST

Jul. 13, 2007 (Investor's Business Daily) --

Where will biotech and pharmaceutical companies find future scientific talent to grow their business? Not in the U.S., based on current trends.

U.S. universities aren't providing biopharma with enough Ph.D. graduates. In 2005, the latest year data are available from the National Science Foundation, U.S. institutions turned out 6,368 Ph.D.s in biological sciences. That was only 1,000 more than a decade earlier. About 30% of U.S. biology Ph.D.s come from abroad. Some will take their skills home. [Note, this doesn't include chemistry PhD or pharmacy degrees, medical doctors, which also contibute to biotech and pharma research, and chemical engineers for manufacturing expertise.
http://www.nsf.gov/statistics/nsf07305/content.cfm?pub_id=3757&id=2 ]

Meanwhile, the industry's talent needs are soaring.

Take the case of Amylin Pharmaceuticals (NASDAQ:AMLN) AMLN, a developer of drugs for diabetes, obesity and related diseases. Its lead drug, Byetta, won regulatory approval in April 2005.

Though the company has yet to turn an annual profit, that is expected to change in a couple of years. Analysts project earnings of 9 cents a share in 2009 and $1.17 a year after that.

With earnings come growth. With growth comes the need for new people.

"We've increased our head count 50% since the beginning of 2006," said Roger Marchetti, Amylin's senior vice president of human resources. "To sustain growth we'll need to double that in the next five to seven years."

Of Amylin's 1,750 employees, one-third have advanced degrees and 180 have Ph.D.s. The company gets most of its new talent from other companies rather than universities.

"There is a war for talent, and that war will get more intense over the years," Marchetti said.

The result is an onslaught of employee poaching, says John Challenger, chief executive of outplacement firm Challenger, Gray & Christmas. Biopharma firms have recruiting databases of relevant scientists, he says, and all the business cards collected at meetings go into those databases.

No wonder keeping workers is Marchetti's top concern. As he puts it: "Retention is the mother of recruiting."

Looking Abroad

Another source of talent is the buyout. With the U.S. beyond full employment for scientists, many big biopharma companies must buy smaller ones to bulk up their staffs.

Last month Amgen (NASDAQ:AMGN) AMGN announced it will acquire Alantos Pharmaceuticals for $300 million in cash. Besides diabetes and arthritis drugs in development, Amgen got Alantos' 45 scientists.

Playing musical chairs with home-grown talent won't last forever, however. Like other technology-based industries, biopharma wants access to foreign talent. But the caps Congress has put on importing science workers from abroad is "limiting the brain power of the globe to come here," Challenger said.

Foreign talent can come to the U.S. in limited numbers to fill jobs Americans can't. They get in on a visa called an H-1B.

Back in early April the federal government already had received more than enough applicants to fill the quota for 2008. It got 150,000 petitions and will grant 58,200 H-1Bs in all job categories. It will grant an additional 20,000 for people with advanced degrees.

That still might not be enough. Amylin has 34 H-1Bs and will need up to 50 more in the next two years.

The Burnham Institute for Medical Research has 500 scientists. Of those, 255 are on visas.

"Virtually everyone we hire these days is from abroad," said Burnham spokeswoman Nancy Beddingfield. "It's unusual to hire an American graduate."

Wanted: Business Sense

The industry needs three categories of scientists, says Gary Firestein, a medical doctor, former biotech executive and head of the Clinical Investigation Institute at the University of California at San Diego.

It needs biologists to make basic discoveries. It needs people who can take discoveries to a precommercial stage by proving the concept. It needs people who design and execute clinical trials.

Above all, it needs graduates with skills in common-sense business practices, like teamwork.

Universities breed "lone wolves" who work alone in labs, not in teams, Firestein says. "The academic lab is designed to clone itself."

The problem is compounded by the fact that many young biotech firms lack the time or funds to train new scientists in the ways of business. That puts even more pressure on universities to incorporate business skills into the classroom.

"Our community wants graduates with both business and science experience," said Duane Roth, head of CONNECT, a networking group that helps young technology firms in San Diego.

Like other biotechs, Amylin is working with schools -- including community colleges -- to develop talent for biotech. Though it does use interns, Amylin stops short of contributing funds to schools.

"We don't have the resources to invest with hard dollars," Marchetti said.

Amylin isn't alone. Most companies won't help pay for the skills they want universities to teach, Firestein says. He questions the logic of that attitude.

"If I go to the industry and ask them to give UCSD $500,000 to support a training program, they would not do it -- even if it's in their best interest," Firestein said. "The industry is shortsighted."

But even the biotech industry knows its domestic university pipeline is drying up. Marchetti predicts that future generations will produce fewer graduates than previous generations.

Amylin has not recruited overseas -- yet. Should Congress open up more jobs for foreigners, the company might consider expanding its recruitment reach.

"Being able to go to where talent is is something we may have to do," Marchetti said.

Newstex ID: IBD-0001-18128163

Originally published in the July 13, 2007 version of Investor's Business Daily.
http://money.cnn.com/news/newsfeeds/articles/newstex/IBD-0001-18128163.htm
---------
---------
The nation's medicine chest?
Posted by James W. Hughes and Joseph J. Seneca July 31, 2007 1:55PM
Categories: economics and demographics

Johnson & Johnson's announcement that it will cut as much as 4 percent of its worldwide workforce and shutter undisclosed facilities is not positive news for New Jersey.

J&J is taking this cost-cutting action because patent expirations in 2008 will subject two of its best-selling drugs to generic competition, causing significant revenue losses. Other major drugmakers, such as Merck and Co., Pfizer Inc. and Bristol-Meyers Squibb Co. (BMS), are also cutting costs and jobs because of increased generic competition to once patent-protected medicines.

New Jersey has one of the largest pharma concentrations in the world, and is the backbone of our knowledge-based, high-technology economy. According to NJBIZ's Book of Lists, J&J (14,000 jobs), BMS (7,583 jobs), and Merck (7,500 jobs) rank among the top 25 largest employers in New Jersey. Thus, what's bad for pharma is bad for the Garden State.

New Jersey has already lost a significant share of the nation's pharmaceutical employment.

Overall, the state accounts for 3 percent of the nation's total employment. That would be our expected share of employment in any industry sector. Yet in 1990, New Jersey had 20.2 percent of the nation's total employment in pharmaceutical and medicine manufactured as measured by the U.S. Bureau of Labor Statistics.

Thus, more than one out of five such pharma jobs in America was located in New Jersey less than 20 years ago, an impressive and unequalled concentration. But, by 2006, the state's pharmaceutical share had fallen to 13.9 percent. This is still an extraordinary concentration and powerful economic presence, but one which has clearly eroded.

Between 1990 and 2006, pharma employment nationally grew by 41.1 percent. In New Jersey, it declined by 2.9 percent. In 2004, California replaced us as the state with the largest number of pharmaceutical jobs. In 1990, California had barely half the number of pharma jobs as New Jersey. California's pharma employment grew by 93.5 percent between 1990 and 2006.

So, New Jersey may no longer be the unchallenged medicine chest of America. Consequently, given the national and global trends in pharma of greater competition and relentless pressures on costs, it is essential for New Jersey to become a more hospitable business environment for pharma to invest in discovering the new drugs of tomorrow.

http://blog.nj.com/njv_hughes_seneca/2007/07/the_nations_medicine_chest.html