Biotech, people, Layoffs
ZymoGenetics Will Be Missed. How Seattle Biotech Can Recover and Thrive
Stewart Lyman 9/21/10
I agree with Carl Weissman’s recent Xconomy column about the ZymoGenetics acquisition when he says that Seattle needs to be a place where biotech startups thrive. Unfortunately, his column didn’t put forth any novel solutions for making this happen (I know this wasn’t his point in writing the article). I am also in agreement that hand wringing doesn’t help ease the loss, but a moment of reflection here is certainly called for. I will admit to being saddened by the Bristol-Myers Squibb acquisition of ZymoGenetics and the potential loss of some 300 plus jobs from the local biotech scene. I felt just as bad (actually, worse, being a scientist myself) when their research group was previously shut down and the scientists were let go. I haven’t heard anyone suggest that the latest biotech buyouts (Trubion Pharmaceuticals and ZymoGenetics) are harbingers of doom, though they may seem that way to those who lose their jobs. However, it is naïve to think that they won’t have a negative impact in the short term. Ted’s comment in response to Carl’s piece did a fine job of capturing the painful impact that may await many of those employees.
Biotech advances flow from the well of scientific discovery. Individuals who haven’t worked in a biotech setting don’t always grasp the synergistic benefits of putting together a research team that recombines individual talents to innovate fantastic discoveries that lead to new drugs. This doesn’t happen often in the industry and is a rare and valuable thing. Many of us who competed against ZymoGenetics over the years would acknowledge that they had assembled such a team. ZymoGenetics own website points out that products that they discovered or developed (and which are currently marketed by other companies) have combined yearly sales of over $3 billion. Another example: look at the articles that have been written chronicling how Roche has bent over backwards not to perturb the research culture of the recently acquired Genentech. They recognize their valuable investment and the need to protect innovation. They are hopeful that the Genentech group will continue to produce novel drugs at their industry-leading pace. Making money investing in biotech, whether as a VC or as a stock market investor, is certainly very demanding. However, actually developing a novel drug and getting it on the market is significantly more difficult. There are numerous examples of companies that have been acquired (thereby returning money to their investors) but the drugs that they were purchased for didn’t pan out.
A quick look at the WaBio website shows only about 33 job openings at local biotech companies, with about an equal number of jobs listed for academic and other institutions. Since 2002, when Amgen bought Immunex, there have been over 3,200 layoffs at local biotech companies (not including any upcoming layoffs at ZymoGenetics or Trubion), and I would wager that a lot of these folks were unable to find employment locally. Taking their skills elsewhere did not benefit us here in Seattle. The loss of ZymoGenetics may indeed lead to new companies being formed by those with an entrepreneurial spirit, as Carl suggested. However, it will take years (if ever) for these putative new companies to employ the number of individuals who typically are let go in these acquisitions. This also assumes that these companies get VC or other financial backing, which in the current economic climate is far from guaranteed. Also, Carl suggests that acquisitions recycle liquidity to investors, but how many of those investors are actually here in Seattle? Won’t most of that money go to support ventures (and not necessarily biotech) in other parts of the U.S. and, indeed, the world?
Many of us who work in the industry use the term “biotech anchor tenant”, but the phrase is often employed without benefit of a clear definition. Given that this term may mean different things to different people, I will offer one. A biotech anchor tenant for a city or a region, to my mind, is a company that meets two general criteria: (1) it is a near constant source of at least some jobs, owing to it’s relatively large size, rate of employee turnover, growth rate, or combination of these factors, and (2) is stable in the region and is not likely to close, relocate, or be acquired. This second criteria is getting harder and harder to meet. Even Big Pharma has closed down a number of its research facilities in the past year, with significant negative effects on the communities involved. For example, Pfizer abandoned its New London, CT research campus (and moved 1,400 jobs) leaving the town devastated. And even Big Biotech (e.g. Genentech), as we now know, was not too big to be acquired. Amgen’s Helix campus here in Seattle would meet this general definition as an anchor tenant, but more significantly, I would argue that Dendreon …Next Page »
Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle.
I'm thrilled at the response to my previous blog post on America's need for 401(k) reform. The bad news is that big business has already developed a strategy to kill reform -- by intimidating the rank and file into lobbying against it. And it's perfectly legal.
While President Obama justifiably criticized the Supreme Court's Citizen United ruling that pretty much removes the limits from campaign spending in advertising, the real scandal on Capitol Hill isn't bankrolling corrupt candidates but creating a "fake citizens lobby" that convinces elected officials to vote the wrong way. It's perfectly legal for big business to pressure employees to lobby against reform that would help employees -- presumably employing the "spin" that reform is a job killer.
The group that's behind this tactic is one you've probably never heard of, BIPAC, a coalition of business owners and associations. When it comes to corporate skulduggery, you can't get much more lowlife than the National Association of Manufacturers (NAM), one of BIPAC's leading members. NAM has fought against regulating derivatives because doing so "could hinder job creation for manufacturing" -- gee, which factories manufacture derivatives? NAM has also demanded the overhaul of the Family and Medical Leave Act because employees abuse it, and argued that employees who suffer from repetitive stress injuries such as carpal tunnel syndrome aren't really disabled.
There's a good chance that a "fake grass-roots effort" orchestrated by NAM helped convince members of Congress to drop their support for the Employee Free Choice Act, which lets workers opt for unionization simply by signing cards rather than through secret ballot elections. When I went to the page on a website that BIPAC created displaying sample campaigns, I saw a link where employees of NAM's member companies are encouraged to "Tell Members of Congress to Oppose the 'Employee FORCED Choice Act." Technically speaking, businesses can't punish employees who refuse to go along with this effort but in these tough economic times, I wouldn't be surprised if employees are likely to do what they're told rather than risk their job security.
Not surprisingly, NAM is a member of an employer group whose purpose is to fight any reform of 401(k) plans called The Coalition on Employee Retirement Benefits (CERB). Remember Enron? One of its most despicable practices was matching employees 401(k) contributions with company stock, which turns into "play money" if the company goes under. It's very likely that CERB's lobbying efforts watered down the Pension Security Act, which merely allows workers to sell company stock within three years of receiving it rather than limiting it in 401(k) accounts or prohibiting it altogether. As I pointed out in my book, "America, Welcome to the Poorhouse," in a letter to members of the Senate Finance Committee, CERB hints that if Congress is too hard on employers they might stop making 401(k) contributions altogether: " employers are not allowed to meet the legitimate business of encouraging employee ownership...they are likely to reduce or eliminate matching contributions."
How do we get members of Congress to work for the taxpayers who pay their salaries, as opposed to the business lobby? My thinking is that the chance of passing genuine campaign reform legislation is slim -- especially since Congress would have to vote for it. Instead we should create a citizens lobby, comprised of blue and white collar Americans who are watching their American dream turn into a nightmare, whether we're talking about higher medical co-pays, or unaffordable mortgages. Even when it comes to job shortages, most of us are "all in this financial stress together" -- whether we're affected by blue-collar factory jobs that have been outsourced to China or radiology/engineering jobs that have been off-shored to India.
As former SEIU President Andy Stern told me, "Team USA is in trouble. We don't have a plan. Let's grow up, people. This is a global economic war. We need to shake off complacency and get out of our self-analytical malaise." Forget about this Tea Party nonsense, we need a genuine new American revolution against the business lobby and those in Washington who do its bidding.
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Read our PlayStation 3 news of Deathspank: Thongs of Virtue heads PSN.
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After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.
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robert shumake
Deathspank: Thongs of Virtue heads PSN PlayStation 3 <b>News</b> - Page 1 <b>...</b>
Read our PlayStation 3 news of Deathspank: Thongs of Virtue heads PSN.
Homosexual advocacy group not legitimately Catholic, military <b>...</b>
After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.
FileMaker releases FileMaker Go updates for iPhone and iPad <b>...</b>
iLounge news discussing the FileMaker releases FileMaker Go updates for iPhone and iPad. Find more iPad news from leading independent iPod, iPhone, and iPad site.
Biotech, people, Layoffs
ZymoGenetics Will Be Missed. How Seattle Biotech Can Recover and Thrive
Stewart Lyman 9/21/10
I agree with Carl Weissman’s recent Xconomy column about the ZymoGenetics acquisition when he says that Seattle needs to be a place where biotech startups thrive. Unfortunately, his column didn’t put forth any novel solutions for making this happen (I know this wasn’t his point in writing the article). I am also in agreement that hand wringing doesn’t help ease the loss, but a moment of reflection here is certainly called for. I will admit to being saddened by the Bristol-Myers Squibb acquisition of ZymoGenetics and the potential loss of some 300 plus jobs from the local biotech scene. I felt just as bad (actually, worse, being a scientist myself) when their research group was previously shut down and the scientists were let go. I haven’t heard anyone suggest that the latest biotech buyouts (Trubion Pharmaceuticals and ZymoGenetics) are harbingers of doom, though they may seem that way to those who lose their jobs. However, it is naïve to think that they won’t have a negative impact in the short term. Ted’s comment in response to Carl’s piece did a fine job of capturing the painful impact that may await many of those employees.
Biotech advances flow from the well of scientific discovery. Individuals who haven’t worked in a biotech setting don’t always grasp the synergistic benefits of putting together a research team that recombines individual talents to innovate fantastic discoveries that lead to new drugs. This doesn’t happen often in the industry and is a rare and valuable thing. Many of us who competed against ZymoGenetics over the years would acknowledge that they had assembled such a team. ZymoGenetics own website points out that products that they discovered or developed (and which are currently marketed by other companies) have combined yearly sales of over $3 billion. Another example: look at the articles that have been written chronicling how Roche has bent over backwards not to perturb the research culture of the recently acquired Genentech. They recognize their valuable investment and the need to protect innovation. They are hopeful that the Genentech group will continue to produce novel drugs at their industry-leading pace. Making money investing in biotech, whether as a VC or as a stock market investor, is certainly very demanding. However, actually developing a novel drug and getting it on the market is significantly more difficult. There are numerous examples of companies that have been acquired (thereby returning money to their investors) but the drugs that they were purchased for didn’t pan out.
A quick look at the WaBio website shows only about 33 job openings at local biotech companies, with about an equal number of jobs listed for academic and other institutions. Since 2002, when Amgen bought Immunex, there have been over 3,200 layoffs at local biotech companies (not including any upcoming layoffs at ZymoGenetics or Trubion), and I would wager that a lot of these folks were unable to find employment locally. Taking their skills elsewhere did not benefit us here in Seattle. The loss of ZymoGenetics may indeed lead to new companies being formed by those with an entrepreneurial spirit, as Carl suggested. However, it will take years (if ever) for these putative new companies to employ the number of individuals who typically are let go in these acquisitions. This also assumes that these companies get VC or other financial backing, which in the current economic climate is far from guaranteed. Also, Carl suggests that acquisitions recycle liquidity to investors, but how many of those investors are actually here in Seattle? Won’t most of that money go to support ventures (and not necessarily biotech) in other parts of the U.S. and, indeed, the world?
Many of us who work in the industry use the term “biotech anchor tenant”, but the phrase is often employed without benefit of a clear definition. Given that this term may mean different things to different people, I will offer one. A biotech anchor tenant for a city or a region, to my mind, is a company that meets two general criteria: (1) it is a near constant source of at least some jobs, owing to it’s relatively large size, rate of employee turnover, growth rate, or combination of these factors, and (2) is stable in the region and is not likely to close, relocate, or be acquired. This second criteria is getting harder and harder to meet. Even Big Pharma has closed down a number of its research facilities in the past year, with significant negative effects on the communities involved. For example, Pfizer abandoned its New London, CT research campus (and moved 1,400 jobs) leaving the town devastated. And even Big Biotech (e.g. Genentech), as we now know, was not too big to be acquired. Amgen’s Helix campus here in Seattle would meet this general definition as an anchor tenant, but more significantly, I would argue that Dendreon …Next Page »
Stewart Lyman is Owner and Manager of Lyman BioPharma Consulting LLC in Seattle.
I'm thrilled at the response to my previous blog post on America's need for 401(k) reform. The bad news is that big business has already developed a strategy to kill reform -- by intimidating the rank and file into lobbying against it. And it's perfectly legal.
While President Obama justifiably criticized the Supreme Court's Citizen United ruling that pretty much removes the limits from campaign spending in advertising, the real scandal on Capitol Hill isn't bankrolling corrupt candidates but creating a "fake citizens lobby" that convinces elected officials to vote the wrong way. It's perfectly legal for big business to pressure employees to lobby against reform that would help employees -- presumably employing the "spin" that reform is a job killer.
The group that's behind this tactic is one you've probably never heard of, BIPAC, a coalition of business owners and associations. When it comes to corporate skulduggery, you can't get much more lowlife than the National Association of Manufacturers (NAM), one of BIPAC's leading members. NAM has fought against regulating derivatives because doing so "could hinder job creation for manufacturing" -- gee, which factories manufacture derivatives? NAM has also demanded the overhaul of the Family and Medical Leave Act because employees abuse it, and argued that employees who suffer from repetitive stress injuries such as carpal tunnel syndrome aren't really disabled.
There's a good chance that a "fake grass-roots effort" orchestrated by NAM helped convince members of Congress to drop their support for the Employee Free Choice Act, which lets workers opt for unionization simply by signing cards rather than through secret ballot elections. When I went to the page on a website that BIPAC created displaying sample campaigns, I saw a link where employees of NAM's member companies are encouraged to "Tell Members of Congress to Oppose the 'Employee FORCED Choice Act." Technically speaking, businesses can't punish employees who refuse to go along with this effort but in these tough economic times, I wouldn't be surprised if employees are likely to do what they're told rather than risk their job security.
Not surprisingly, NAM is a member of an employer group whose purpose is to fight any reform of 401(k) plans called The Coalition on Employee Retirement Benefits (CERB). Remember Enron? One of its most despicable practices was matching employees 401(k) contributions with company stock, which turns into "play money" if the company goes under. It's very likely that CERB's lobbying efforts watered down the Pension Security Act, which merely allows workers to sell company stock within three years of receiving it rather than limiting it in 401(k) accounts or prohibiting it altogether. As I pointed out in my book, "America, Welcome to the Poorhouse," in a letter to members of the Senate Finance Committee, CERB hints that if Congress is too hard on employers they might stop making 401(k) contributions altogether: " employers are not allowed to meet the legitimate business of encouraging employee ownership...they are likely to reduce or eliminate matching contributions."
How do we get members of Congress to work for the taxpayers who pay their salaries, as opposed to the business lobby? My thinking is that the chance of passing genuine campaign reform legislation is slim -- especially since Congress would have to vote for it. Instead we should create a citizens lobby, comprised of blue and white collar Americans who are watching their American dream turn into a nightmare, whether we're talking about higher medical co-pays, or unaffordable mortgages. Even when it comes to job shortages, most of us are "all in this financial stress together" -- whether we're affected by blue-collar factory jobs that have been outsourced to China or radiology/engineering jobs that have been off-shored to India.
As former SEIU President Andy Stern told me, "Team USA is in trouble. We don't have a plan. Let's grow up, people. This is a global economic war. We need to shake off complacency and get out of our self-analytical malaise." Forget about this Tea Party nonsense, we need a genuine new American revolution against the business lobby and those in Washington who do its bidding.
robert shumake
Deathspank: Thongs of Virtue heads PSN PlayStation 3 <b>News</b> - Page 1 <b>...</b>
Read our PlayStation 3 news of Deathspank: Thongs of Virtue heads PSN.
Homosexual advocacy group not legitimately Catholic, military <b>...</b>
After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.
FileMaker releases FileMaker Go updates for iPhone and iPad <b>...</b>
iLounge news discussing the FileMaker releases FileMaker Go updates for iPhone and iPad. Find more iPad news from leading independent iPod, iPhone, and iPad site.
robert shumake
Deathspank: Thongs of Virtue heads PSN PlayStation 3 <b>News</b> - Page 1 <b>...</b>
Read our PlayStation 3 news of Deathspank: Thongs of Virtue heads PSN.
Homosexual advocacy group not legitimately Catholic, military <b>...</b>
After receiving a letter from the group Catholics for Equality urging a change to the “Don't Ask, Don't Tell” policy, the Archbishop for Military Services responded, saying that the archdiocese's position is “clear.
FileMaker releases FileMaker Go updates for iPhone and iPad <b>...</b>
iLounge news discussing the FileMaker releases FileMaker Go updates for iPhone and iPad. Find more iPad news from leading independent iPod, iPhone, and iPad site.
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