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Ohio bioscience industry continues path toward global powerhouse

12:25 pm by | 0 Comments

Updated 10:11 a.m., April 1, 2010.

The Ohio bioscience industry grew by several measures through the recent economic downturn, continuing its decade-long path from a promising opportunity to a global powerhouse, according to Tony Dennis, president and chief executive of BioOhio.

“Ohio’s aggressive and sound investment strategies in the biosciences are delivering results in the form of jobs, new and recruited companies, and rapidly increasing growth capital,” according to John F. Lewis Jr., BioOhio vice president, in the concluding remarks of his organization’s Ohio Bioscience Growth Report 2009, which was issued today.

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Ohio had at least 1,253 bioscience companies–from agricultural biotechnology companies to testing laboratories–at the end of February, according to research by BioOhio, the state’s bioscience industry developer, and Cleveland State University.

Of the 1,628 locations operated by those companies at the end of 2008, medical laboratories and diagnostic imaging centers accounted for the biggest portion–35 percent, according to the BioOhio report. This segment also accounted for the greatest growth in locations from 2000 through 2008, more than doubling locations to 565 from 281.

Though 39 percent of the locations were in Northeast Ohio, 16 percent were in each of the Central and Southwest Ohio regions, and 11 percent were in the West Central region. Ohio added 81 bioscience organizations in 2008. Northeast Ohio had the most new organizations–39–followed by Central Ohio, with 25, and Southwest Ohio, with 10.

From 2005 through 2009, 179 bioscience companies either expanded or built new facilities in the state, according to BioOhio. In 2009, projects of note included expansions in Columbus/Dublin by science and technology institute Battelle, which created 200 jobs with an investment of $200 million, and in Bedford Heights by generic injectable drug maker Ben Venue Laboratories, which created 200 jobs with an investment of $150 million.

Bioscience jobs in Ohio grew 18 percent from 2000 through 2008, adding more than 8,400 jobs for 55,465 in 2008, according to BioOhio. Compare that to a 4.2 percent decline in all the state’s employment sectors in that period.

Medical labs and diagnostic imaging centers accounted for the greatest job growth in those nine years–52 percent–adding 2,572 jobs for 7,485 in 2008. Pharmaceutical and therapeutics companies were close behind, adding more than 3,000 jobs, or 47 percent, in that time.

Meanwhile, medical device and equipment makers subtracted 253 jobs from 2000 through 2008 for a loss of 1 percent. However, these companies had the largest payrolls among bioscience companies in 2008–$1.1 billion, or 29 percent of the Ohio industry’s total.

One industry in the agricultural biotechnology subsector–all other basic organic chemical manufacturing–accounted for more than half of the subsector’s employment in 2008 with an average wage of $101,700. Northeast Ohio has the most employees in this industry, BioOhio said. Research and development companies paid the next best, for an average wage of just over $87,000.

Northeast Ohio had the most bioscience jobs in 2008–34 percent–followed by Central Ohio with 26 percent and Southwest Ohio with 21 percent.

BioOhio and Cleveland State also tried to estimate the bioscience industry’s economic impact on the state in 2008. The employment impact was 162,859 jobs, according to the BioOhio report. Those jobs produced $9.5 billion of household income in Ohio. In addition, the value of the goods and services bought and sold by bioscience companies was $46.7 billion in 2008.

Because it has the largest number of bioscience jobs and locations, Northeast Ohio contributed the biggest part of the economic impact in the sector: $3.3 billion in labor impact and $17.8 billion in in goods and services in 2008.

“Ohio’s higher education depth and breadth is at the core of its bioscience strength,” according to the BioOhio report. Ohio institutions and companies received $637 million in National Institutes of Health grants in 2008, led by Case Western Reserve University, with $166.3 million, and Ohio State University with $130 million.

Meanwhile, the National Science Foundation’s Directorate of Biological Sciences awarded $13.1 million in grants to Ohio institutions in 2008. And the state’s organizations garnered $75.7 million from the Small Business Innovation Research and Small Business Technology Transfer Research programs in that year.

In 2008, Ohioans were issued 330 bioscience-related patents. And university licensing revenue–which comes largely from transfer of technology to companies from universities–was led by Case Western Reserve, with $13.2 million, and Ohio University, with $5.8 million.

In 2009 (not 2008), 16 Ohio hospitals were named by U.S. News & World Report to its America’s Best Hospitals rankings. Ohio hosts nearly 17 percent of the nation’s clinical trials. The state’s “robust clinical network” and its “prominent medical institutions make Ohio an ideal proving ground for biomedical innovations,” according to the BioOhio report.

Consistent with national trends, investment in the state’s bioscience companies fell to $1.5 billion in 2008 from a record $2.5 billion in 2007, according to BioOhio.

Venture investing and acquisitions also were down in 2008 and continued their down trend in 2009. Despite the downturn, more than $189 million in venture capital flowed to Ohio bioscience and health care companies in 2008, and another $96 million in 2009. Cleveland was the second-most active bioscience investment market in the Midwest in 2008, behind only Minneapolis.

During 2008 and 2009, the Ohio Third Frontier project funded 27 new bioscience projects with $138 million in state money, which was matched by $153 million in corporate funding, BioOhio said.

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Mary Vanac

By Mary Vanac

Mary Vanac is a co-founder of MedCity News.
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