By David N. Leff
CAMBRIDGE, Mass. -- If Boston is the hub of the solar system, then greater Boston isthe axis of biotechnology. A major multinational enterprise found its way there by aprocess of scientific elimination.
Why in the world -- and how -- did one of Germany's largest chemical giants decide tolocate its biotechnology R&D center in the hinterland of Boston instead of in its ownfatherland?
When the directors of BASF AG of Ludwishafen am Rhein decided to strengthen theirbudding presence in biotechnology five years ago, the whole world was their oyster. Ineffect, they spun the globe to select a site for BASF Bioresearch Corp., their newspin-off company.
That company's venture director, Peter F. Moesta, told a biotechnology conference atthe Massachusetts Institute of Technology here last week that what pushed them out ofGermany was “the nasty situation“ vis-a-vis public perception ofbiotechnology.
“Essentially, a consensus was being developed between the Green Party, the SocialDemocratic party, the churches and so on that recombinant DNA was a technology associatedwith major risks, similar in magnitude to the nuclear industry. This ultimately resultedin passage of the Gene Law in 1990, which severely restricted any type of rDNA researchand development in Germany.“
Looking beyond their country's own borders for a place to build, Moesta went on, theirfirst thought was France, specifically Strasbourg.
BASF also considered the Netherlands and Japan before turning to the U.S. BASF turnsover $25 billion a year, 8 percent of it in pharmaceuticals. The company employs 50,000people in Germany, its No. 1 market. The U.S. comes next, with $5.6 billion in annualsales.
In the U.S., Moesta pointed out, BASF's activity has been all in production, notresearch. “Therefore, adding a major research laboratory to our American presencewould be an added benefit,“ the site-selection task force reasoned.
California Was First Inclination
Scanning the U.S. map for regional foci of biotechnology, Moesta said his firstpersonal inclination was California. But the West Coast is 10 or 11 hours away fromBASF/Germany, which would complicate telecommunications.
The East Coast time gap is only six hours, “so in the fall of 1988, we decideddefinitely on the Eastern U.S.,“ Moesta recalled.
This embraces a very large area, including Research Triangle Park, N.C.; theWashington, D.C, area; Philadelphia; New Jersey; and greater Boston. So to help make theirfinal regional choice, the site team assigned numerical values to the six factors theydeemed most important. Their priorities in descending order:
1. Regulatory environment.
2. Scientific environment.
3. Availability of qualified staff.
4. Access to Frankfurt airport.
5. Attractiveness of lifestyle.
6. Overall business environment.
After intensive and extensive reconnaissance in situ, BASF selected greaterBoston. Incidentally, the area is home to the largest concentration of biotechnologystartups -- 142 -- outside San Francisco Bay Area (see BioWorld, April 29). ForBASF, Moesta said, “the area's strength is in cutting-edge, basic-discoveryscience.“
With some friendly persuasion from the Massachusetts state secretary of economicaffairs, the BASF site seekers found final happiness at the biotechnology incubator campusof Worcester, 40 miles west of Cambridge.
“It's cost of living is lower than in the Boston area,“ Moesta said, andemployee amenities are excellent. “Permits were already in place in the biotechnologypark, sparing us environmental impact review. Water and sewage lines were in -- somethingrare in the hinterland. And Worcester's proximity to other universities, including theUniversity of Massachusetts Medical Center, is very attractive.“
In fact, of all the selection criteria, the only negative one that Moesta and hiscolleagues could find with Worcester is its distance from Cambridge, home to MIT andHarvard. “The commute is not manageable on a daily basis,“ he observed.
Contract Signed in 1989
BASF signed a purchase contract with the Worcester Business Development Corp. inFebruary 1989 and closed on its 30-acre site in June. The price has not been disclosed.Construction started in November 1990, project manager Steven Murray told BioWorld,and construction costs will total $84 million.
The five-level structure covers 250,000 square feet of usable space, about 140,000 ofit dedicated to biotechnology R&D and pharmaceutical pilot-plant operations. It willfocus on cancer and immune system disorders.
Murray expects full occupancy by Oct. 1, with an initial 230 employees, about 150-160of them in R&D, including 50 scientists. An administrative wing will house theheadquarters management personnel of BASF bioresearch Corp.
Moesta observed, “Currently, the German political parties are discussing revisionsto the Gene law, which would make it more simple to conduct research and development ofrecombinant DNA. But nothing has yet been decided.“