Life Science Industry Continues to Rise

Life Science Industry Continues to Rise

The companies in the Indiana life science industry are breaking their own records again. As if their former figures weren’t lofty to begin with, they’ve gotten bigger and the state is making a concerted effort to see those impacts grow even larger. Recently, Indiana’s efforts to advance the industry even garnered some national attention in new reports.

To begin, let’s take a look at how the industry is currently doing. New data was recently released from BioCrossroads and the Indiana Business Research Center that contained some impressive stats from last year:

  • The economic impact of the state’s life sciences industry – comprised of pharmaceutical, medical device and equipment, agbiosciences, research, testing and medical laboratories, and biologistics – continues to grow and is now at $78 billion.
  • The number of life sciences companies totals 1,689 with 55,688 employees. Payroll remained strong too. The average wages for the sector is about $94,700 per worker, resulting in a life sciences payroll total of $5.3 billion for the state.
  • R&D stayed strong. 80 new products gained approval from the U.S. FDA last year.
  • Indiana maintained its position as the second-highest exporter of life sciences products in the U.S.
  • Start-up capital hit a record high in 2017 in both funding amounts and the number of companies receiving investments:
    • $107 million in venture funding fueled the development of 33 life-sciences start-up companies.
    • Orthopediatrics, an orthopedics company developing products for the pediatric market, went public, one of only two IPOs in Indiana this year with a current market capitalization of $250 million.
  • There were three separate billion-dollar life science transactions last year:
    • CoLucid was acquired by Eli Lilly and Co.
    • Cook Pharmica was acquired by Catalent
    • Assembly BioSciences’ market capitalization

“The billion-dollar deals are not only big for Indiana but represent major transactions anywhere in the world. This activity as well as our steady numbers for companies, employees and exports serve as ready confirmation that when it comes to the life sciences industry, Indiana indeed remains a ‘Tier I’ state,” said David L. Johnson, president and CEO of BioCrossroads.

State employment in medical manufacturing. (Information Technology and Innovation Foundation, Joe Kennedy, 2018)

Indiana’s Efforts to Maintain the Trend

In a national report that was released early this spring, author Joe Kennedy, senior fellow from the Information Technology and Innovation Foundation (ITIF), one of the world’s leading science and technology think tanks, identified Indiana as being one of five states that stand out for its efforts in advancing the growth of the life science sector. Colorado, New Jersey, North Carolina, and Washington were also included for their life-science-promotion policies.

“Because of the positive trends and future growth potential (of the medical life sciences sector), a growing number of state governments have enacted policies to support new life-science start-ups, encourage firms already in the state to expand their investments, and attract new life-science activity to their jurisdictions,” Kennedy wrote.

Indiana’s R&D tax credit is the most generous in the nation, allowing companies to deduct 10–15 percent of R&D expenses. (Information Technology and Innovation Foundation)

The report detailed several specific economic elements that help the industry thrive. They include the presence of world-class universities that focus on technology innovations and commercialization, an environment that is attractive to the kinds of highly-skilled individuals that make up the industry’s talent base, a strong start-up company support structure that incorporates things like venture capital and entrepreneurial resources, and larger firms to act as anchors for the industry. All of which Indiana clearly possesses, increasingly so over the last few years.

Among Indiana’s biggest strengths the report cited are its three major research universities and, most notably, the work of BioCrossroads itself, which the ITIF stated is the most important catalyst for life sciences. It’s ability to provide connections for the industry in the form of corporate, academic, philanthropic, and financial partnerships is the core of Indiana’s ongoing momentum.

Specifically, ITIF stated the two startup investment funds established by BioCrossroads, the $73 million Indiana Future Fund and the $58 million INext Fund, “complement the state’s work in providing seed capital generated from state, philanthropic, and industry sources to businesses for the purpose of commercializing and validating their technology.”

Also, the collaborative efforts that BioCrossroads created in its Indiana Biosciences Research Institute is another area in which partnerships are expected to strengthen commercialization opportunities. The Institute was founded with an initial $25 million in state money and additional equal sum from corporate and philanthropic donors. Its goal is to improve R&D discovery speeds by removing barriers and fostering cross-industry collaboration, among other things.

Additionally, the report also cited Indiana’s R&D tax credit as being a major benefit to the industry. Companies are able to deduct 10 to 15 percent of their R&D expenses, making Indiana’s tax credit the most generous in the nation.

Indiana is also supporting the industry in other ways, particularly through several of Governor Holcomb’s Next Level initiatives in areas like workforce development. However you slice it, the state is definitely a fan of life sciences and its various subcategories and is making major strides toward keeping the industry burgeoning.