Innovation drives growth in the biotech and pharmaceutical space. According to The Pharmaceutical Research and Manufacturers of America (PhRMA), the U.S. biopharmaceutical sector directly supports more than 900,000 jobs across the economy. Manufacturing employs more than 330,000 high-wage workers in more than 1,500 facilities across 47 states and Puerto Rico.
The association also noted that member companies invested $102.3 billion in research and development in 2021, and that the biopharmaceutical industry represents one out of every six dollars spent on domestic R&D in the U.S.
The 2023 Beyond Borders report from Ernst & Young noted that the biotech sector saw a 1% revenue dip in 2022, compared to a 35% increase in 2022. The report noted that the post-pandemic change was due to decreased demand for COVID-19 vaccines and antiviral treatments. EY also noted that without the revenue impact of COVID-19 products, the industry’s revenues increased 3.7% in 2022, compared with 5.2% growth in 2021.
Biotech will face some challenges, EY noted, such as upcoming patent expirations, decreased approvals for new drugs from the U.S. FDA due to staff shortages at the agency, and venture capital and other financing decreasing. Still, companies are looking for sites, and in June the Biotechnology Innovation Organization (BIO), in partnership with the Council of State Bioscience Associations (CSBA), released a report on best practices for economic development in biosciences. The report identified four national trends that help retain and grow the bioscience sector at the state level in 2023: building career pathways for talent, ensuring predictable, stable regulatory treatment of biosciences firms, using technology-based economic development tax support strategies, and partnering with universities and research centers in pre-commercialization research.
Here are some regions that are attracting biotech and pharma companies.
Lexington, Kentucky: Innovation Corridor
Sitting at the crossroads of two major interstates—I-75 and I-64—and within a day’s drive to over two-thirds of the U.S. population, Lexington is the innovation corridor of Kentucky’s biotechnology sector.
The Greater Lexington Region’s biotech industry is anchored by the presence of the University of Kentucky (UK) and its robust research programs in the life sciences. The UK College of Medicine and Markey Cancer Center have been instrumental in driving advancements in medical research and attracting top-tier talent to the region. UK’s College of Pharmacy is ranked #6 in the nation by U.S. News and World Report and features the largest pharmacy education and research building in the world.
In addition, Lexington is home to the only research and development business park in the state of Kentucky—University of Kentucky Coldstream Research Campus. Coldstream, a 735-acre office park, was specifically designed for recruiting high-tech and biotech companies, as well as university centers and start-ups.
The area also benefits from the presence of Bluegrass Community and Technical College (BCTC). BCTC offers associate degrees and certificates and places an emphasis on STEM courses in numerous programs.
State and local government and economic development organizations have played a vital role in supporting the growth of the biotech industry in Lexington. Initiatives such as tax incentives, grants, and partnerships with private entities have helped attract investment and foster collaboration between academia and industry. Commerce Lexington actively collaborates with the Lexington Economic Partnership, the University of Kentucky (UK), and Launch Blue to grow, recruit, and retain biotech companies. To date, this strategic collaboration has recruited 28 Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) funded companies to the region under Kentucky’s SBIR/STRR Match Program.
The success stories of several biotech companies based in Lexington further highlight the city’s potential as a biotech hub. Alltech, a global leader in animal health and nutrition, was founded in Lexington and has grown into a multinational corporation. Lexington serves as Neogen Corporation’s Animal Safety headquarters, which recently announced an expansion, and has grown to 220 employees across two Lexington facilities and one in Mt. Sterling, KY.
Funai Microfluidic Solutions (FMS), a research and development firm of thermal inkjet microfluidics for life sciences, recently celebrated relocating its headquarters from Osaka, Japan to Lexington. Mike Marra, Chief Technology Officer at FMS, said, “The relocation of our headquarters to Lexington was a natural progression as our facility transitioned from an R&D center to the driver of our global strategy. This facility’s unique blend of pioneering technology and exceptional skill sets fuels our vision.”
The Greater Lexington Region is committed to fueling the growth of the biotechnology industry in the Bluegrass. Its educated workforce, strategic geographic location, low cost of doing business, and high quality of life are among the area’s strongest assets. Lexington has leveraged its culture of innovation and commercialization, a superior business climate, the University of Kentucky’s top ranked research programs, and an expansive network of medical centers to provide an environment where a diverse life sciences industry can grow and thrive.