Biotechnology is a growing field in New Jersey. It is showing growth at a time when New Jersey’s long-standing pharmaceutical industry is shrinking.
A recent poll of N.J. biotech companies showed that, despite losses by Big Pharma, New Jersey continues to be an attractive place to set up a business. Worries about sustainability and finances, though, keep them cautiously optimistic.
The survey, conducted by Ernst & Young and published by BioNJ, found that there are now 340 biotech companies in N.J. That is up from 300 in July 2010, an increase of 13 percent. The number of jobs in the industry has increased from 15,000 to 16,400 (9.3 percent) over the last two years and 71 percent of respondents anticipated hiring more employees in 2012.
On the other hand, the study also found that early-stage research is having a hard time getting funding as the economy continues to struggle. That said, 46 percent of respondents to the survey had been operating in N.J. for five years or less and 37 percent had been in business for five years or less. This suggests that N.J. continues to attract both old and new biotech companies.
Despite encouraging news, money is still tight for biotech companies right now. The study showed that 57 percent of the companies that responded reported having than $10 million in the bank as of December 31, 2011. That is up from 50 percent in 2009 and 46 percent in 2007.
The study suggested that this decrease in funding came from venture capitalists, who provided 26 percent of funding in 2009, becoming more cautious and cutting off funds for early-stage research. They provided only 16 percent of funding over the last two years.
Debbie Hart, president of BioNJ told NJBiz that this is a common problem for biotech companies now.
"Certainly it would be naïve not to be concerned," she said. "It is a reality across the industry, so it's not a New Jersey specific problem — it's no reflection on New Jersey — but it certainly continues to be a concern."
The study made some suggestions to improve the future outlook for biotech in New Jersey. They include creating and improving economic incentives, state financial support for the very earliest-stage companies, enhancing New Jersey’s academic environment and encouraging entrepreneurial spirit.