Yale University confirmed it is purchasing Bayer AG”™s former facilities in West Haven and Orange, calling the deal a major leap forward for its biotechnology research programs.
The transaction may represent a step backward, however, for the immediate prospects of Connecticut”™s life-science industry.
Bayer revealed last summer it would leave West Haven, dumping 17 buildings with a total 1.4 million square feet of space onto the market, including 550,000 square feet of laboratory space. With several major biopharmaceutical expansions under way in the Northeast ”“ and with the creation last year of a $100 million fund for investments in stem-cell research ”“ state economic development officials had hoped to lure a major player.
In May, Swiss pharmaceutical company Lonza began preparing a $300 million mammalian-cell culture factory in Portsmouth, N.H., that will accommodate up to 350 workers. After shopping for locales in other states, Organogenesis accepted $13 million in incentives to expand at its existing location in Canton, Mass., with plans to add 300 jobs. And Bristol-Myers Squibb is building a $750 million facility on an abandoned U.S. Army base northwest of Boston.
Shire Pharmaceuticals P.L.C. has indicated it is considering several states for an expansion involving up to 1,000 jobs, but the company has not considered the West Haven property or other Connecticut sites, spokesman Matt Cabrey said, despite the site being close to a major research institution like Yale.
“The size of (the) facility is outside the scope of what Shire was looking for,” Cabrey said. “We”™re manufacturing enzyme replacement therapies in small batches, so we don”™t need a lot of space.”
Cabrey said Massachusetts is likely the front-runner for the expansion, given existing Shire facilities in Cambridge that have close proximity to Harvard University and the Massachusetts Institute of Technology.
Also helping is a new $1 billion life-science investment program unveiled in May by Massachusetts Gov. Deval Patrick.
Life-science industry employment is down slightly in Connecticut to approximately 17,000 jobs, according to Connecticut United for Research Excellence (CURE). The decline has occurred despite expansions in Fairfield County by Boehringer-Ingelheim Pharmaceuticals Inc. and MannKind Pharmaceuticals Inc., and Pfizer Inc. recently shifting jobs from Michigan to its massive plant in Groton.
In 2005, the most recent year for which CURE published statistics, bioscience organizations occupied 10 percent less laboratory space as in 2004, and 15 percent less office space.
The data suggest Connecticut needs to work harder to roll out the red carpet for the industry, said Paul Pescatello, president and CEO of CURE.
With Yale snapping up the Bayer campus, with the Associated Press pegging the deal at $100 million, officials like Pescatello will have to hope that resulting academic research there leads to a small army of fast-growing startups. Already, the city of New Haven is host to 40 biotechnology companies, seven of them launched in the past year with venture capital backing.
Fairfield County also continues to attract startups ”“ this spring, pain therapy startup Cara Therapeutics Inc. relocated to Shelton from Tarrytown, N.Y., and seed investments from Connecticut Innovations Inc. have spurred a few tri-state area startups to establish headquarters offices here.
At its peak, Bayer employed 2,500 people at the West Haven site, a payroll Yale said it might match in time. It did not indicate whether that would involve new hires or the transfer of existing jobs to the Bayer site.
Because academic campuses are not subject to property taxes, Yale will make voluntary payments to the municipalities, which will also receive payments in lieu of taxes from the state.
Yale has commitments to build 2 million square feet of new space in New Haven over the next six years, and is in negotiations to lease space in the city”™s Science Park as an incubator for future spinoffs.
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