North Carolina landed Biogen Idec’s 250,000-square-foot large-scale manufacturing plant in Research Triangle Park because of its renowned universities, workforce training system, its business-friendly environment and quality of life.

But the Massachusetts-based company went to Denmark to build a twin of the plant and its 90,000-liter bioreactor capacity, to reduce its exposure to U.S. corporate taxes, according to the company’s president and CEO George Scangos.

Scangos made his revelation to a record 300 people gathering for NCBIO’s annual meeting last week at the North Carolina Biotechnology Center.It was to explain Biogen’s reasoning behind its business decisions on siting the two factories, among the largest biologic manufacturing facilities of their kind in the world.

Scangos cited several other North Carolina assets he sees as especially attractive to Biogen:

  • The Lineberger Comprehensive Cancer Center at the University of North Carolina at Chapel Hill;
  • The Wake Forest Institute for Regenerative Medicine;
  • Duke University, now basking in the recent announcement that one of its star researchers, Robert Lefkowitz, is sharing this year’s Nobel Prize in chemistry.

Biogen recently announced a major collaboration with Duke and the HudsonAlpha Institute for Biotechnology to sequence the genomes of up to 1,000 patients with amyotrophic lateral sclerosis (ALS) in an effort to gain a deeper understanding about the fundamental genetic causes of what’s commonly known as Lou Gehrig’s disease.

The Massachusetts-based company is not only a highly prized employer, but also appreciated for its charitable foundation’s community outreach. It has invested heavily in North Carolina’s pre-K through grade-12 education programs in science, engineering, mathematics and technology.

Win Some, Lose Some

Throughout the day-long program, business leaders reflected on the “highs” wrought by the unique collaborative environment permeating North Carolina’s life-science community, to the “lows” of an uncertain global economic and regulatory climate.

Things are especially dicey for companies trying to bring new healthcare products to market, speakers and panelists agreed. Major shifts in paying for health care increasingly require entrepreneurs to add new “diligence” to their due diligence. Most agreed that means girding not only to show regulators and insurers the safety and effectiveness of a new therapy, device or diagnostic, but also to show how it’s going to save money.

“The world we’ve known has been price equals value,” summarized one panelist, Todd Evans, director of pharmaceuticals and life sciences for Pricewaterhouse Coopers. “But we’re entering a structural shift that requires agility and the recognition that it’s now defined as outcomes equal value. Our model is now incentivizing quality outcomes,” which he compared to moving a big ship “away from the fee-for-service tradition.”

Quintiles Leader Sees Possibilities

Tom Pike, CEO of North Carolina’s own Quintiles, told the NCBIO annual meeting participants not to give in to doom and gloom, even though he is concerned “about where the money will come from for innovation.”

Despite a 35 percent drop in biotech funding from 2007 through 2011, he said, things have picked up in 2012. And he encouraged the audience to seek opportunities among the challenges that loom.

For example, since he took the helm at Quintiles in April, he said, he’s been “on a mission to reduce Quintiles’ customer costs 20 percent.” That will take many forms, he noted, but genomics will help if more physicians can become educated to their benefits. He said 45 percent of clinical trials would benefit from the use of genomics to categorize patients’ likely responses to therapies, but fewer than 25 percent of physicians recommend that their patients use the technology.

Clinical trials today are better than ever because they’re able to rely on increasing amounts of data. Pike said Quintiles operates its own “digital patient unit,” a genomics lab, to help it “scale things up.” But he added that inefficiencies in standardization and in sharing of data are also creating costly barriers for new drug development and testing.

Pike showed a chart depicting a sharp and steady decline in the number of new drugs approved in the United States per billion dollars of R&D investment. Meanwhile, he said, China now has 4,200 biopharmaceutical companies, the government funds those labs, and many of the founders have studied in the United States.

More cooperation between U.S. government entities and pharmaceutical companies, as well as some appropriate arms-length sharing among pharmaceutical companies themselves, will be needed to keep this country competitive, said Pike.

Editor’s note: Jim Shamp is director of public relations for the North Carolina Biotechnology Center.

(C) N.C. Biotech Center