Market Information
United States

Biotechnology Sector Profile:
USA (Washington)

May 2002

Manuel M. Ellenbogen
Business Development Officer
Canadian Embassy
501 Pennsylvania Ave. NW
Washington DC 20001
Tel.: (202) 682-7766
Fax: (202) 682-7619
E-mail manuel.ellenbogen@dfait-maeci.gc.ca
Internet: http://www.canadianembassy.org

Market Overview

The Mid-Atlantic region, which comprises Delaware, Maryland, Pennsylvania, Virginia and Washington DC, has the fourth-largest concentration of biotechnology companies in the United States.

Delaware's industry is comparatively small, but is growing quickly. National Institutes of Health (NIH) support to Delaware institutions increased by nearly 81% from 1996-2000, and the state is developing a strategic plan that includes a focus on the bioscience industry.

Maryland initiated a comprehensive biotechnology strategy in 1991, and now has the third-largest concentration of bioscience companies in the nation. The state is home to a number of federal facilities that act as a draw to biotech companies, including the National Institutes of Health.

Pennsylvania recently enacted a $3 billion1 strategy to boost biotechnology. The strategy includes investing almost $99 million/year in its universities and research institutions, creating a life-sciences venture fund, and creating three lifesciences "greenhouses."

Virginia is home to about 180 biotechnology/life-sciences companies and has a number of organizations that can help new and growing biotechnology companies, including Virginia's Center for Innovative Technology and the Virginia Department of Business Assistance.

Little biotechnology activity is seen in Washington DC proper, with most activity located in the surrounding Maryland and Virginia suburbs. One of the potential attractions of DC to biotechnology companies is its proximity to a number of important federal facilities.

Opportunities

Several strategies lend themselves to successful entry into the U.S. biotechnology market:

• Companies may enter as independent startups, either stand-alone or as a branch of an existing Canadian biotechnology business. The primary source of funds for this approach is private venture capital (VC), a situation that is somewhat encouraging. For the whole of 2001, the biotechnology sector saw the largest gains in terms of percentage of total investment from VC, rising to 8.2% in 2001 from 3.5% in 2000.
• Joint-venture partnerships with established U.S. companies are also encouraging, with many companies in Delaware, Maryland, Pennsylvania and Virginia interested in bio-partnering.
• In terms of licensing and technology transfer, there are a number of good sources for finding and implementing such agreements, including the major research universities in the Mid-Atlantic states, the Federal Consortium for Technology Transfer and the National Technology Transfer Center.
• Contract research and manufacturing are another avenue, both of which are on the increase.

Outsourcing to Canadian biotechnology companies may be attractive to U.S. companies in the Mid-Atlantic states due to the favourable exchange rate and relative proximity to Quebec and Ontario.

A complete Biotechnology Market Study in the Mid-Atlantic States was recently completed and is available upon request from M. M. Ellenbogen at the Canadian Embassy in Washington DC. The study will soon be available on the Web.

Market Access Considerations

The agencies primarily responsible for regulation of biotechnology in the U.S. are the U.S. Department of Agriculture, the Environmental Protection Agency, and the Food and Drug Administration. Products are regulated according to their intended use, with some being regulated under more than one agency. Three other important areas of regulation that affect the biotechnology industry are U.S. patent law, the Health Insurance Portability Act of 1996 and U.S. customs regulations.

Other Useful Information Sources/Web Sites

For detailed market reports about this sector, please visit http://www.infoexport.gc.ca