In 2015 when Dr. Marco Taglietti, president and chief executive officer of Scynexis, was looking to move his headquarters out of Research Triangle Park in North Carolina he had several choices including New York and Boston – both hot spots for pharmaceutical and biotech companies.
But it was Jersey City that ultimately got Taglietti’s attention.
“New Jersey is in a very strategic position where you can connect with the workforce, investors and the rest of the world,” Taglietti said.
“In our decision process, we evaluated many strategic, operational and logistics factors. Overall, New Jersey compared favorably to other locations and, when we considered the financial incentives offered by the state, the decision of moving to New Jersey was the most rational for us.”
Taglietti said the key selling point is that New Jersey’s top pharmacy companies boast the full range of expertise: early discovery, product development, commercializing and manufacturing.
“You have got resources and talents that can take you from the very beginning to the very end of the drug development and commercialization process.”
New Jersey is home to some of the industry’s leading players, and while the state has lost some pharma and biotech business in recent years, most notably Hoffmann-LaRoche, other firms have replaced them resulting in a net increase in jobs. Industry leaders and experts say the same characteristics that lured the first wave of companies – many of which are now global giants – continue to attract new entrants and provide fertile ground for startups.
It is no secret that the Garden State has been pushing hard with incentives to lure pharmaceutical and biotech firms.
Scynexis benefited from $6.7 million awarded under the state Technology Business Tax Certificate Transfer Net Operating Loss (NOL) program. “It was a good incentive for us,” said Taglietti, who received his medical degree from the University of Pavia in Italy.
For Debbie Hart, president of BioNJ, the fact that more than half of the world’s 40 largest life sciences companies have a presence in New Jersey comes as no surprise.
“When you look at the continuum of the industry whether it’s early stage, big pharma, later stage biotechs, clinical research organizations plus all the service providers, including attorneys and accountants who support the industry in their work, we have the entire spectrum represented right here,” said Hart.
A differentiator for New Jersey, Hart said, is that it has commercialization talent. In 2017 and 2018, companies with a footprint in the state were responsible for more than 40 percent of all new FDA novel drug approvals.
New Jersey boasts more than 400 biotech companies, 3,300 life science companies; and more than half of the top 20 research-based biopharma companies. More than half of the top 20 medical tech companies in the world call New Jersey their global, North American or U.S. headquarters.
“Big pharma and plenty of smaller innovator companies are on that list. The Murphy administration’s economic incentives and other things such as incentives for training workers, initiatives encouraging students to stay in New Jersey and a program where incubators offer free rent for a period of time are all appealing,” Hart said.
Hart also listed other assets, including world-class institutions like Rutgers University, Princeton University and New Jersey Institute of Technology, the Hackensack Meridian School of Medicine at Seton Hall University and a rich talent network.
“We’re seeing opportunities because we have the talent and because we have unique geographic accessibility as well as laboratory and real estate space for these companies,” said Kathleen Coviello, vice president of technology and Life Sciences Investments at the New Jersey Economic Development Authority (NJEDA). Coviello cited the NJ Ignite program, which provides grants that support early-stage technology and life science companies in New Jersey collaborative workspaces.
“We have incredible access to infrastructure in New Jersey: airports and ports,” said Brian Sabina, senior vice president, Office of Economic Transformation at the NJEDA. Sabina said that the transportation infrastructure in the state is an incredible advantage in the new world of life science.
“When you look at the evolution of where the life science sector is going, access to transportation is becoming more relevant. Companies are making new decisions on locating near train stations and creating satellite offices in more urban environments,” Sabina said.
In May, NJEDA announced the five New Jersey biotechnology startups that would attend the BIO International Convention in Philadelphia, the largest biotech gathering in the world.
Sabina said that BIO International Convention offers a unique opportunity for the NJEDA and New Jersey-based biotechnology companies to show the world why the Garden State is an optimal place to establish and expand their businesses. It also enables early-stage companies to showcase themselves on a global stage and talk about the positive experiences they are having in the state.
The Economic Development Authority selected five companies to represent New Jersey startups at this year’s BIO International Convention in Philadelphia. The firms underscore the depth of expertise the state can attract and nurture.
3D Biotek LLC, in Bridgewater, supports the research community by offering 3-D cell culture products. The company has recently developed a large-scale 3-D Cell Expansion System to serve as an enabling technology for the emerging field of stem-cell therapy and bio-banking. 3D Biotek is a graduate of the NJEDA’s Commercialization Center for Innovative Technologies (CCIT) biotechnology incubator.
Engage Therapeutics, in Summit, is a clinical-stage biopharmaceutical company developing a Rapid Epileptic Seizure Termination (REST) therapy for people with epilepsy. Funding from a 2017 $23 million Series A round enabled Engage Therapeutics to progress its investigational product, Staccato alprazolam, into a Phase 2b randomized, double-blind study. The study is currently ongoing and open for patient enrollment.
Socium Therapeutics Inc., based in Parsippany, is developing orally-administered cancer vaccines. The company is currently raising capital for a Phase 1 trial of the lead candidate targeting prostate cancer from its CReST vaccine platform.
OncoSec Medical Inc. is developing late-stage intratumoral cancer immunotherapies. OncoSec was founded in San Diego, but when entrepreneur Daniel O’Connor be-came CEO of the company, he moved it to Pennington to reap the many benefits of locating in New Jersey, including its highly-talented pharmaceutical workforce.
Tyme Technologies, in Bedminster, is an emerging biotechnology company that is developing cancer metabolism-based therapies (CMBTs) intended to be effective across tumor types and offer low toxicity profiles. TYME is focused on advancing its lead candidate SM-88 in pancreatic, prostate, sarcoma, and breast cancers, while also planning for development into multiple metastatic cancers where SM-88 has shown encouraging results.
The startups were selected from a group of companies that submitted video responses to the question “Why Choose New Jersey?” Reasons cited by the selected companies include proximity to large pharmaceutical companies and world-class cancer institutes; affordable lab space; and opportunities to partner and network with the state’s vast biotechnology community.
Paul Rittman, CEO of Iselin-based Helsinn Therapeutics, agreed that having access to four airports and Wall Street is an asset, as well as the concentration of life science and pharma companies.
“This is where the partners are and access to experienced talent is. It’s all positive – and also the universities and academic centers in New Jersey and Philadelphia where a lot of great science is being done. Being in close proximity really allows good interaction with scientists as well as some of the top physicians in the country,” Rittman said.
Michael Tardugno, chairman, president and CEO of Lawrenceville-based Celsion Corp., moved his company to New Jersey from Maryland after considering other locations on the East Coast including Cambridge, Mass. “Maryland has a great seasonal climate, a reasonable business climate, and well-educated, hard-working population. But it did not have the kind of resources necessary for a startup company in this very sophisticated rigorous business of clinical development,” he explained.
Tardugno said he has worked in a number of locations in the pharma industry. What impressed him the most about New Jersey was the quality and the experience of individuals in the sector.
“From manufacturing to commercialization and everything in between; all of the important components that would be necessary for us to bring a drug candidate through rigorous clinical trials. We needed a full complement of people with all of the skill sets,” Tardugno said.
Tardugno added that he needs people with a broad base of experience to work across functional lines.
“There is no better place in the world than New Jersey. We did not move here for the economic incentives – but there were some economic incentives related to employment numbers that were attractive. But they weren’t the deciding factor. It was support from the economic development people – they really understand our industry,” said Tardugno.
Other appealing aspects of the region according to Tardugno, included access to some of the best contract research organizations (CROs) and high-quality efficient consulting services.
“We are a company that is not dependent on selling medicines to finance our research; we sell stock. We have quick access to Wall Street, 45 minutes on a train and we are in downtown New York.”
Even negatives such as high taxes, expensive housing and traffic congestion are offset by positive attributes.
For Tardugno it was a matter of balance. “We didn’t consider them negatives in any meaningful way. It’s a marginal difference,” he said. “We were operating in the center of Maryland close to Washington, D.C. where traffic and gridlock are equal to New Jersey.”
PsychoGenics Inc. moved to Paramus from Tarrytown, N.Y. just over a year ago.
CEO Emer Leahy said tax incentives from NJEDA were a major catalyst in making the move to New Jersey as well as ongoing relationships with academic institutions including Rutgers.
“We do drug discovery in neuropsychiatric disorders but we also offer pre-clinical testing services. The work force and talent pool is great in New Jersey. There are a lot of wonderful scientists locally.”
Leahy said PsychoGenics is studying strategic options to expand its drug discovery operation.
Rich history, promising future
It’s hard to underestimate the impact that industry giant Johnson & Johnson has on the pharma industry in New Jersey.
According to industry insiders, its mere presence over the years has been a major catalyst in maintaining the state’s image as the Medicine Chest of the World and in attracting new companies.
New Brunswick is J&J’s home because James Wood Johnson – one of the three founding brothers – took a train from New York to Philadelphia in January of 1886. When the train stopped in New Brunswick, Johnson looked out the window and saw a small four-story brick building with a for rent sign on it. He got off the train, looked at the building and rented it for the new business he and his brothers were starting. The company has been in the same spot ever since.
“As it turned out, New Brunswick was a great place for our founders to locate the company in 1886,” said company spokesman Ernie Knewitz.
Knewitz said New Jersey had a great potential workforce, it had other industries, some of which became suppliers to J&J, and it was located halfway between New York and Philadelphia.
It also had great transportation – the railroad, the Delaware & Raritan Canal and the Raritan River. Knewitz said that all of the advantages J&J saw in the state were evident to other pharma and health care companies.
“We are committed to New Jersey, which has so much to offer businesses with its proximity to leading universities, medical research labs and industrial resources,” said Knewitz.
Dean Paranicas, president and CEO of the Health Care Institute of New Jersey, said the state has a long-standing legacy and tradition in the pharmaceutical and biotech industries. “We have a strong foundation and we continue to build it. We’ve earned the reputation as the medicine chest of the world and we will sustain it.”
“I would say that there is ample evidence of a thriving, vibrant life sciences industry in New Jersey,” Paranicas said. “What Marco Taglietti did is a good representation or an illustration of what we’re talking about. Scynexis is a great example of early-stage drug development companies who benefited from the fact that they got a new leader who was familiar with what New Jersey has to offer and saw real opportunity for growing his company in New Jersey rather than North Carolina.”
Paranicas acknowledged that when a company departs, there are consequences. However, he asserted that other companies step into that space.
“Developments like that do have an impact, but at the same time they create opportunities and those opportunities suggest a replenishment and moving forward.”
Paranicas said early-stage companies find New Jersey attractive because they have an opportunity to grow and collaborate with the established corporations with roots and a dynamic presence here.
Taglietti said that while iconic companies like J&J can rally the industry, a strong industry does not happen by itself.
“We should not be complacent. We should be active. We should try to bring new companies in and create an even stronger environment. I think that it is critical for the political, academic and pharma communities to work together and make New Jersey more appealing to the pharma biotech industry so companies will naturally think about New Jersey when they want to relocate to a place where there is a vibrant corporate culture,” Taglietti said.
Paranicas contends that the increased interest in New Jersey by new companies is significant.
“This is indicative of a tremendous amount of a renewed ongoing commitment in New Jersey in terms of investing and bringing more capital in. Because it’s all about where the next dollar is spent.”