The number of biotechnology companies operating in New Jersey continues to increase significantly despite the downturn in the economy, ongoing difficulties in obtaining venture capital and other forms of funding and a contraction in the biotechnology and pharmaceutical industries at both the state and national levels, according to initial results from an industry survey released today by BioNJ, the trade association for the biotechnology industry in New Jersey.
“From what we are seeing, this growth is coming from both outside and within the state and is a result of a number of factors, including the presence of a well established life science industry and strong supporting infrastructure that includes economic incentive programs offered by state government.”
Biotechnology companies with operations in New Jersey increased from 238 as reported in a similar survey released in 2008 to more than 300 in the latest survey, according to information compiled for New Jersey Life Sciences, Dealing with the New Normal, a survey conducted by BioNJ with assistance from Ernst & Young.
Of the companies responding to the survey, 31 percent reported that they had been in business five years or less and 51 percent reported that they had been operating in New Jersey for five years or less.
Importantly, 78 percent of the responding companies indicated that they intended to hire additional personnel in the next 12 months.
"The initial data from our latest survey provides further evidence that the contributions of the biotechnology industry to the state's economy have been increasing at a time when many other sectors have been flat or slumping," said Debbie Hart, president of BioNJ. "From what we are seeing, this growth is coming from both outside and within the state and is a result of a number of factors, including the presence of a well established life science industry and strong supporting infrastructure that includes economic incentive programs offered by state government."
Hart noted that the information released today was preliminary, but the organization felt it was important to "get the good news out" during a time when proposed cuts to the state budget threaten to severely weaken economic development programs that are particularly supportive of startup and early stage companies.
These include the New Jersey Technology Business Tax Certificate Transfer Program, which allows startup and early stage companies with 225 employees or fewer to sell their net operating losses (NOLs) to profitable companies for cash.
According to the survey, 36 percent of the responding companies participated in the Tax Certificate program in 2009.
Under the current budget proposal for FY 2011, the Tax Certificate Transfer Program is slated to be cut by 50 percent, reducing its allocation from $60 million to $30 million.
The New Jersey Commission on Science and Technology, which among other things funds fellowships and incubator programs, is projected to lose all of its $10 million funding in FY 2011.
"The survey documents that companies - particularly startup and early-stage companies -continue to struggle to find funding, separating more widely the gap between the 'haves' and the 'have-nots', and making the State of New Jersey's incentive programs that much more critical to the long-term future of our youngest companies," Hart said.
The survey noted a decrease in publicly held companies, the result of mergers and acquisitions, but despite a decrease from 32 to 23 publicly held companies from 2008 to 2009, the overall industry grew in New Jersey. The market cap for public companies grew by 1 percent, revenues grew by 18 percent and net income fell by 115 percent.
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