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🔒 Report: Life sciences growing rapidly in Delaware

Jacob Owens September 29, 2021

WILMINGTON – A new report released Wednesday highlights the growing investment in life sciences, including biopharmaceutical, research and development, medical technology, agriculture and manufacturing, in Delaware over the last decade. The Life Sciences Report, compiled ...

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Economics, Government, News

Delaware ranks top 3 in tax climate study

Jacob Owens May 7, 2021

WILMINGTON – Delaware officials once lamented the First State’s middle-of-pack reputation for business taxation and costs as a reason why employers were difficult to attract, but a new study blows up that narrative. The “Location ...

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Commercial Real Estate, Economic Development, News, Transportation

Amazon drives Delaware distribution market surge

Jacob Owens April 15, 2021

WILMINGTON – The findings of a recent brokerage report that Amazon’s practically insatiable growth is leading to a boom of industrial and distribution space in Delaware probably won’t surprise many. The sheer scale of that ...

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A new 32-page report from the Delaware Bioscience Association and Delaware Prosperity Partnership details the growth of life sciences in the First State. | COURTESY OF DPP[/caption] WILMINGTON – A new report released Wednesday highlights the growing investment in life sciences, including biopharmaceutical, research and development, medical technology, agriculture and manufacturing, in Delaware over the last decade. The Life Sciences Report, compiled by the Delaware Bioscience Association, which represents the industry, and the state’s economic development agency, Delaware Prosperity Partnership, found that the industry currently supports 11,000 jobs and is responsible for $2 billion of the state’s gross domestic product – both about 2% overall. The report largely captures all of the successes of the industry in recent years, including the recent announcement of WuXi STA’s $510 million pharmaceutical manufacturing plant in Middletown, the 2020 initial public offering of breakout clinical-stage oncology firm Prelude Therapeutics and the development of the state’s new $10 million lab space grant program. It adds greater context to the opportunities and challenges facing the industry, particularly related to access to capital seed funding and workforce. In a Wednesday press conference unveiling the report, Gov. John Carney recalled how life sciences were just beginning to grow 20 years ago when then-Gov. Tom Carper wooed AstraZeneca to Wilmington. It was also when David Weir came to the state with the idea of creating a Delaware Biotechnology Institute with a state investment of $50 million. “Dr. Weir's vision was more of a virtual academy that brought the university and college sectors, private sector and our state together to collaborate on advancing workforce development and economic development around the biosciences and life sciences, but it evolved into our funding for the physical Delaware Biotechnology Institute at the University of Delaware,” said Carney, who at the time served as Carper’s finance secretary. “With that, the seeds for the advancements in biosciences at UD and in our state … was born. It's great to see today, with this report, the fruits of those seeds being sown.” Among the top-line findings of the report were the increasing number of R&D firms, the wealth of regional talent and the growing strength of seed capital despite historic challenges. The number of biotech R&D firms has increased by 65% over the last decade, with many often spinning out of established companies like Incyte, W. L. Gore, and DuPont, or the state’s postgraduate programs at University of Delaware and Delaware State University. [caption id="attachment_215703" align="alignright" width="300"]

The development of R&D startups, like RiKarbon at the STAR Campus, has increased rapidly in Delaware in the last decade. | DBT PHOTO BY JACOB OWENS[/caption] “We certainly continue to have strong, large companies but growth in those other smaller firms, particularly biotech, has been a real asset for the state that continues a diversification that I think sets us up well for the future of the sector,” said John Taylor, director of economic research at DPP. In terms of its geography, Delaware benefits from an abundance of talent. Nearly 30% of U.S. biochemists and biophysicists, and about 16% of pharmaceutical employees work in the greater Mid-Atlantic area. New Castle County also employs more than a third of chemical engineers in the greater Philadelphia area despite having less than 10% of its population. Michael Fleming, president of the Delaware Bioscience Association, noted that geographic expansion of life sciences in Delaware is also beginning to occur as WuXi chose to locate in Middletown and Siemens recently unveiled a $32 million expansion in Glasgow, pushing investments farther south from the Pennsylvania border. “We're creating multiple really thriving hubs in different places,” he added, noting development projects also underway at Chestnut Run near Wilmington and the STAR Campus in Newark. Officials also touted Delaware’s No. 7 ranking for life sciences venture capital investment per capita, although the vast majority of those funds have gone to two startup clinical-stage firms, Prelude Therapeutics and NiKang Therapeutics. Seed funding for startups is often one of the most cited challenges for Delaware-based companies as visibility to investors is lower here than in major life sciences markets like Boston or San Francisco. Aiding the growth of startups is the infusion of federal R&D funding though, with UD ranking in the top 10% for National Science Foundation R&D expenditures and DSU ranking fifth for historically Black colleges and universities. Since 2000, federal R&D grant funding from the National Institutes of Health has more than doubled as a share of overall allocation and the state ranks third in the nation for per capita funding from the NIH’s Institutional Development Award (IDeA) program. [caption id="attachment_215701" align="alignleft" width="300"]

The STAR Campus is now home to cutting-edge R&D from NIIMBL and Chemours, with further developments planned. | DBT PHOTO BY JACOB OWENS[/caption] When asked how the state could support the growth of life sciences into the future, Carney said that the lesson from the last 20 years was that the government should work to incentivize innovation in the private sector while also trying to bring the private sector and research university sectors together. He noted in particular the state’s involvement and funding at both the Delaware Innovation Space at the DuPont Experimental Station and the STAR Campus at UD. “You can't necessarily predict a Prelude Therapeutics or Incyte or Adesis, but when you think about the motivation behind planting those original seeds, that was the outcome that was hoped for,” he said. Carney said that Delaware was not prepared to offer zoned tax incentives on life science developments in the manner that Pennsylvania and other states do, principally because the state already has comparatively low property tax rates. “Where we try to be competitive is the cost of doing business overall in our state,” he said, noting that Delaware managed to land WuXi STA without such a tax incentive. Kurt Foreman, president and CEO of the DPP, added that Delaware has a competitive R&D tax credit that isn’t capped and is refundable. “We’ve found in our conversations with companies that almost alone drops a lot of resources back into a company,” he said. Foreman said that the DPP intends to promote the report to companies and universities in the Washington, D.C., to New York City corridor to increase awareness of the Delaware life sciences market, and potentially help convince some prospects to bring operations or investment here. “We will not hide this under a bushel basket. We will certainly highlight it across the region and across the country, maybe even around the world,” he said.