Since May 2020, Eli Lilly’s had a plot picked out in North Carolina’s famed Research Triangle Park. The area's pull proved so fierce that Lilly last year snapped up 102 acres more. Pharmas and biotechs have been well acquainted with the hub for some time, but, in recent years, there’s been tremendous interest from the life sciences sector across the Tar Heel State.
In fact, late last month, Lilly unveiled designs on a second manufacturing site in the state–this time in Concord, where it put down $1 billion for an injectables plant that will eventually employ 600. Beyond Eli Lilly, Thermo Fisher, Jaguar, Cambrex and Amgen are just a few examples of life sciences companies beefing up operations in North Carolina.
As the state’s biopharma scene heats up, people are relocating and companies are having to compete for talent, Doug Edgeton, president and CEO of the North Carolina Biotechnology Center, said in an interview. There are 775 or more life science companies in the state of North Carolina that directly employ about 68,000 people, he pointed out. The state has another 2,400 industry-supporting organizations that employ about 200,000 people.
“So, we’re looking at roughly a little over a quarter of a million people in the state making a living because of the life sciences,” Edgeton said.
The average life sciences wage in North Carolina is about twice that of the average job, hovering around $90,000 a year, he explained.
Beyond the state’s Research Triangle Park, Edgeton noted Charlotte is poised to become another major hub in about 10 years. Asheville is another site that’s expected to come up in the next several years, he added.
The Tar Heel State's life sciences trajectory
North Carolina has a long history in manufacturing, textiles and tobacco. Once the state realized those industries “were all of yesteryear,” it made a push to break into the biotechnology sector, Edgeton explained.
And, over the more recent past, the North Carolina Biotechnology Center has taken strides to diversify beyond its bread-and-butter biomanufacturing, Edgeton explained.
“Eli Lilly’s decision to expand their presence in North Carolina within two years of their arrival in the state in 2020 is the most recent example of a company recognizing the limitless opportunities and potential for both drug research and manufacturing across the state,” Christopher Chung, CEO of the Economic Development Partnership of North Carolina, said in an emailed statement.
Expanding beyond biomanufacturing has meant that the Biotechnology Center has built out expertise in areas like cell and gene therapy as well as agricultural technology. To see where agriculture and the life sciences converge, look no further than Medicago, GlaxoSmithKline’s Canadian COVID-19 vaccine partner, which recently won a Canadian green light for its GSK-adjuvanted vaccine, now dubbed Covifenz.
Medicago utilizes a close relative of the tobacco plant to produce its vaccine. The company relies on a factory at North Carolina’s Research Triangle Park for the bulk of its production. The biotech built the plant in 2010 through a partnership with the U.S. government to prove the scalability of its plant-based vaccine platform.
As for other companies getting in on the North Carolina action, Thermo Fisher in November 2021 said it was building a laboratory products facility there as part of a $192.5 million contract with the U.S. Department of Health and Human Services.
That same month, Jaguar Gene Therapy, which already has labs in Cary, said it was expanding its footprint in the state with plans for a $125 million upgrade to turn an existing facility into a cutting-edge cell and gene therapy plant.
Meanwhile, Amgen last summer said it was pumping $550 million into a new drug substance manufacturing plant in Holly Springs, where it will eventually hire hundreds.
Rich in talent, sans real estate baggage
The North Carolina Biotechnology Center, for its part, is what Edgeton calls a “neutral third-party convener.” The center gets a grant each year from the state to fund the majority of its business, and it doesn’t have any “skin in the game” when it looks to marshal companies toward North Carolina, he noted.
“I’m very bullish on the future of the life sciences in our state, because we do have a lot of synergies between our research universities and the state and the industry,” Edgeton said.
As for North Carolina’s other perks, the state has a favorable climate, great industry support and a fairly low tax rate, Edgeton added. The most important factor for biopharmas, however, is access to a trained workforce, which the Biotechnology Center supports through efforts like customized training and certificate programs.
The Biotechnology Center works with North Carolina’s colleges to create curriculums for life sciences trainees, which ensures the state’s workforce is ready to roll when companies move in, Edgeton explained.
“Over the past 40 years, North Carolina has become a global leader in the life sciences and biopharmaceutical industries thanks to our world-class universities, highly-skilled workforce and a supportive and welcoming business environment,” stated Chung.
For employees as well, North Carolina provides an ideal venue. Given the sheer number of biopharma outfits setting up shop, a staffer could simply switch companies if they decide to call it quits somewhere, Edgeton noted.
When companies look at North Carolina, they see a state that’s “rich in ideas, rich in talent and rich in quality of life,” he said.
Another important factor? Real estate is still a bit cheaper in North Carolina than in many other parts of the country, he added.
Boston, the San Francisco Bay Area and San Diego were still the nation’s top three life sciences clusters as of the middle of 2021, according to a report by real estate services and investment firm CBRE. “Rents continue to grow quickly, particularly in ascendant markets like Philadelphia and Washington, D.C.-Baltimore,” CBRE said. As of mid-2021, “[n]ew records were hit in Boston, San Francisco and San Diego,” the company added.
Nonetheless, those three markets continue to face the “strongest demand and tightest space availabilities,” CBRE added. In its 2020 report on U.S. life sciences real estate trends, though, CBRE noted Pittsburgh, Houston and Austin were coming up as the next emerging hubs.
Meanwhile, one need only hit the road to see how cosmopolitan North Carolina is becoming. “We have more tags around our state when you’re driving across the state now than you used to see,” Edgeton pointed out. While it used to be mostly North Carolina, South Carolina and Virginia cars, he’s now seeing license plates from places like California, New York and New Jersey. “So, people are, I think, leaving those markets and coming to these markets,” Edgeton said.