life science research
1:00 pm
Wed November 23, 2011

Seattle's biotech, research economy faces multi-threat future

Biotech and research jobs have increased in Washington, even as the overall economy sputtered. That’s according to a trade-group, the Washington Biotechnology and Biomedical Association.

But the outlook for next year and beyond is less rosy.

This industry, or economic sector, reportedly includes about 33,000 jobs statewide, from private drug companies to university research labs. It depends on government funding, as well as venture capital – and both of those are starting to shrink. 

Local role of federal dollars

For example, the University of Washington received approximately $571 million for 2010 in federal funding through the National Institutes of Health – making it the third largest recipient (the top two are Johns Hopkins University and the University of Pennsylvania). 

And the Fred Hutchinson Cancer Research Center ranks in the top-25 nationally. That federal funding keeps many labs humming around the university medical center – and is helping to build the new research neighborhood in Seattle's South Lake Union.

Local labs have thrived on a burst of money from the stimulus funding of 2009-2010. That's running out this year. And, next year, the main federal research programs could take a hit, if the budget cutting in Congress proceeds.

State money dwindling

Meanwhile, Washington state's modest (by comparison) attempt to boost health-related research is on its own form of life-support. The Life Sciences Discovery Fund was a signature project of Governor Chris Gregoire when she took office in 2005. It directs a portion of the legal settlement with tobacco companies into a research fund. 

In the past, grants from the fund were for several million dollars each and went to top scientists around the state. But the annual funding dropped from $32 million dollars in 2009 down to $4.5 million this year – as the legislature redirected it to other health-care programs.

"We get an eight-to-one return on investment, in terms of what state gets back," says Lee Huntsman, director of the LSDF. He followed the grant-winners trajectories, and most of them leveraged their state funding into larger federal or foundation grants. Some saved the state money on health care costs (by reducing surgical errors, for example).

Private money drying up, too

To make matters worse, investors have been shying away from biotech companies. They can see its getting harder for new drugs to pass safety reviews and there’s less appetite for expensive new drugs.

At the WBBA's annual meeting last week, an expert panel agreed that researchers and companies are all going to need to collaborate more – and go after funding as teams.