Big drug companies setting up shop in area
By Ronald Rosenberg, Globe Staff, 03/21/99
ome of the world's major pharmaceutical firms are quietly invading
Massachusetts.
For years, big drug companies like Pfizer Inc. and Merck & Co. have
stuck to tried-and-true ways for discovering new drugs, slow and
expensive processes that often involve huge research staffs. But several
biotech firms concentrated in Massachusetts and California have been
outpacing the drug companies in developing promising drugs, using
advanced techniques aided by computer modeling and genetics research.
After years of licensing drugs created with this technology, the big
companies are now adopting the latest drug discovery strategies
themselves. As a result, from Cambridge to Worcester, the firms are
building research outposts to tap the Boston area's scientific pool and
vaunted medical establishment.
''What we are seeing with the influx of large pharmaceutical companies is
something we never envisioned 10 or 15 years ago,'' said Joseph J.
Donovan, director of Emerging Technology Development in the state's
office of business development.
Other observers say the arrival of big drug companies here was only a
matter of time. ''They're coming here because Boston combines university
research and the biotechnology industry with advanced medicine coming
out of hospitals,'' said Steven Holtzman, Millennium Pharmaceutical's chief
business officer. ''So there is a competitive advantage for the
pharmaceutical industry to having a part of its research enterprise here.''
In November, Pfizer opened its Discovery Technology Center in a former
biotech laboratory near the Massachusetts Institute of Technology campus.
The center, which now has a staff of about 15 scientists and will add
another 100 during the next two years, evaluates drug discovery
technologies, according to John LaMattina, senior vice president of
worldwide operations at Pfizer Central Research in Groton, Conn.
Eventually, the center will share its results with Pfizer labs worldwide.
LaMattina said Cambridge was a ''natural setting to try out new
therapeutical and technological approaches'' because of its high
concentration of ''world-class scientific institutions.''
Similarly, Merck is looking to put down roots in Boston in its quest for
250,000 square feet of research space in the Fenway, not far from the
Longwood medical area.
The most ambitious project, however, is being planned by Amgen Inc., one
of the world's largest drug and biotech companies, based in Thousand
Oaks, Calif. Amgen plans to break ground in September for an eight-story,
285,000-square-foot research facility in Kendall Square, next to Genzyme
Corp. in Cambridge.
The company has wanted to build an East Coast research center since
1993, when it signed a major research and technology agreement with
MIT. But the building project was halted when Amgen acquired a large
biotech company in Boulder, Colo., where it already had a research and
development lab.
David Kaye, an Amgen spokesman, said the company decided to finally
come to Cambridge because of the huge scientific research talent pool in
Greater Boston, the proximity to MIT, and access to biotech partners such
as Praecis Pharmaceuticals Inc.
Earlier this month, Amgen said it will spend $100 million this year to
complete the testing and development of a Praecis drug to treat prostate
cancer. ''We recognize not every valued scientist wants to move to
Thousand Oaks, Calif., so we're going to the Boston area,'' Kaye said.
Pharmaceutical companies face major challenges in discovering
blockbuster drugs over the next 10 years. Genetic engineering - the
technology used to alter the genetic material of living cells to produce new
substances - is at the cornerstone of a revolution in developing drugs.
Many pharmaceutical giants are focusing on the links between genes and
diseases using nontraditional drug discovery methods. The goal is to create
drugs with few side effects to treat illnesses for which there are no effective
medications.
Researchers estimate that in the next decade, genomics, which is the study
of the genetic code, will increase the number of compounds from which
drugs evolve from 500 today to between 3,000 and 10,000, according to
a recent study for the pharmaceutical industry by Boston Consulting Group.
In coming to Massachusetts, the cash-rich drug companies are seeking to
improve their ability to find the compounds that will lead to new drugs -
and to forge even stronger ties with the biotech firms that have become
leaders in genetic research.
About one-third of drugs marketed by the major pharmaceutical
companies are the products of compounds licensed from biotech firms,
according to the BCG study. Currently, biotech companies nationwide
have isolated approximately 150 compounds that could generate 8 to 12
new government-approved drugs a year until 2003 and account for
hundreds of millions of dollars in annual sales for each drug, the study
states.
For Pfizer, which spends $2 billion a year on drug research, the decision to
expand to Cambridge was simply a way to find new methods of capturing
these drugs.
''We wanted to get away from the tyranny of our own success,'' said Alan
R. Proctor, head of Pfizer's Discovery Center. ''We do very well
discovering drugs, but we needed a place to try new things away from our
main research center and to tap a new environment with new ideas. We
know that if we don't change our ways, we'll fall behind and be out of
business.''
This story ran on page C01 of the Boston Globe on 03/21/99.
© Copyright 1999 Globe Newspaper Company.
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