The Arizona Bioindustry Association, Inc. (AZBio) has been supporting life science innovation and life science innovators in Arizona since 2003. As a nonprofit membership organization, AZBio is the combination of hundreds of companies working together to help Arizona become a top-tier bioscience state and to discover, develop and deliver lifesaving and life-changing innovations to people in Arizona and around the world.
Catalysts for growth
Globally, the biggest news of 2003 was that the International Human Genome Sequencing Consortium, led in the United States by the National Human Genome Research Institute at the National Institutes of Health (NHGRI) and the Department of Energy (DOE) had completed the full sequence of the human genome.
“The completion of the Human Genome Project should not be viewed as an end in itself. Rather, it marks the start of an exciting new era — the era of the genome in medicine and health,” said Dr. Francis Collins in the April 14, 2003 press release. “We firmly believe the best is yet to come and we urge all scientists and people around the globe to join us in turning this vision into reality.” Collins was the director of NHGRI in 2003 and is today the director of the National Institutes of Health.
In Arizona, a $500 million strategic investment by the State of Arizona into university infrastructure in 2003 began a new era of industry growth. Arizona State University broke ground on the Biodesign Institute and announced that Dr. George Poste would head the institute. The state’s investment would later also support building the BIO5 Institute at The University of Arizona, which opened in 2006, and the Applied Research and Development Building at Northern Arizona University, which opened in 2007, and other research facilities. In 2017, the State of Arizona renewed its commitment to building the state’s innovation ecosystem and approved an additional $1 billion in bonds for university research infrastructure.
In 2003, the City of Phoenix began construction of the first new building on the Phoenix Biomedical Campus. Over time the campus would grow to include the headquarters of the Translational Genomics Research Institute (TGen), the UA College of Medicine-Phoenix, the Health Sciences Education Building, the University of Arizona Cancer Center at Dignity Health St. Joseph’s Hospital and Medical Center, the UA Biomedical Sciences Partnership Building and more. More than $526 million has been invested by the partners on the 30-acre campus since 2003.
Lasting impact, the kind that spans generations, depends on a series of strategic investments and commitments made by both the public sector and the private sector. So, in 2003, in recognition of the commitment to build a viable biosciences industry in Arizona, the Arizona Bioindustry Cluster was reincorporated and changed its name to the Arizona Bioindustry Association, Inc. The board of directors included bioscience company executives, university leaders, individuals from state and local agencies and suppliers working together to help facilitate growth through member benefits, education programs and events, business networking, public policy and entrepreneurial endeavors. For 15 years, members of AZBio’s board of directors have led the organization as it works with AZBio members and the community to help Arizona realize its potential and become a top-tier bioscience state.
Measurements of progress can take many forms and often focus on data that is readily available. Economic factors can be readily accessed from government reports and extrapolated to estimate economic impact. Business success is often measured in market caps of companies and the value of IPOs and acquisitions. Quantifying the value of innovations is often harder to measure, but has the potential to deliver the greatest impact of them all.
Based on economic data from the Biotechnology Innovation Organization (BIO) and TEConomy Partners, Arizona is one of just 15 states that grew biotech employment by 5,000 or more during the period from 2002-2016. The Flinn Foundation, also working with TEConomy Partners, published a report that showed Arizona’s combined biotech and hospital job gains at 58 percent for the period. According to BIO, the 1,310 Arizona-based biotech and med tech firms supported 25,686 jobs in 2016. Arizona’s annual average wage for biotech and med tech (non-hospital) was $77,807, which is $32,726 higher than Arizona’s average wage. A study released in June of 2018 by BIO shows that the U.S. bioscience industry reached $2 trillion in annual economic impact in 2016, while maintaining accelerated venture capital investment and job growth numbers. Among U.S. technology sectors, the bioscience industry has held a leading position as an economic driver and job generator. Based on Arizona’s share of the national employment and wage data, this equates to an estimated annual economic impact of $23.16 billion contributed by Arizona’s biotech and med tech sector (not including hospitals) in 2016.
Investors in AZBio member companies have also seen notable successes. Ventana Medical Systems, Inc. was acquired by Roche for $3.4 billion in 2008. Abraxis Biosciences was acquired by Celgene for $2.9 billion in 2010. The combined acquisition values of Molecular Profiling Institute (Caris), Cord Blood Registry (AMAG Pharmaceuticals), Ulthera (MERZ) and Calimmune (CSL Behring) add another $1.6 billion to the mix.
The numerical impacts of life-changing and lifesaving innovations may be harder to measure, but if you ask the people who are living longer and better lives because of them, these are what they value most. AZBio members include Arizona’s leading research institutes, universities and hospital systems, as well as both global life science leaders and exciting emerging growth companies that are developing and delivering solutions that can detect disease at the earlier stages when treatment is more likely to be effective, preventing disease with vaccines, treating chronic diseases like diabetes and Crohn’s disease more effectively so patients can manage their health, fighting the deadliest cancers, and manufacturing treatments and surgical interventions that help to manage pain, keep our hearts beating, our blood flowing and that deliver critical medicines when they are needed.
Realizing our potential
Over the last 15 years, Arizona’s biotech and med tech industry has made considerable progress compared with where we started from. The exciting fact is that our potential for future progress is even greater. Measuring on a percentage basis when you started off small can be misleading. That is why AZBio’s leaders look at both our progress against where we started and how we compare with other states of a similar population (our population peer group). While we consistently show growth against our own baseline, we are falling behind as compared with the economic impact of our peers.
If the number of companies, employment statistics and wages are the measure of economic results, investment is the driver.
The level of investment into our research enterprises directly impacts their ability to attract and retain the research teams that can fill our pipeline of future innovations. The level of investment made into our emerging growth companies, directly impacts their ability to attract talent and to build up the facilities needed to bring their products to market. Arizona’s levels of life science investment are consistently below where they need to be if we are to realize our potential.
This is why AZBio continues to advocate on behalf of the Technology Research Initiative Fund (TRIF) that was created under Pop.301 so that our universities can continue to attract and retain world class research talent.
AZBio travels around the United States connecting with potential funding sources for Arizona life science companies and created the White Hat Life Science Investor Conference to bring them to Arizona in 2014, hosted it again in 2016, and will host it this year in October of 2018. It’s a strategy that is working. Since the beginning in 2014, companies that presented at White Hat have reported almost $200 million in funding.
It is also why AZBio has partnered with the Opportunity Through Entrepreneurship Foundation (OTEF), the Stetson Family Office and the Healthcare Impact Foundation (HCIF) to launch a capital campaign to support a $200 million endowment (AZ-HCIF) that can be a resource to fund innovative young life science companies in Arizona forever.
Joan Koerber-Walker is president and CEO of the Arizona Bioindustry Association, Inc.