Biotech Strategy Blog

Commentary on Science, Innovation & New Products with a focus on Oncology & Hematology

I was in Austin last week for a business meeting (spot the snow around the State Capitol) and was interested to learn that Austin, TX is an emerging and growing biotechnology cluster.

Michael Porter in the Harvard Business Review has written about the importance of clusters of interconnected companies, universities, suppliers and service providers and how these drive increased productivity, innovation and stimulate further new businesses.  An important contributor of growth and economic development is the pool of talented workers that develops and is attracted to the local area around the cluster.

Despite being better known for its high tech companies such as Dell, and as the “live music capital of the world”, there is an emerging biotech cluster around Austin. Austin boasts warm winter weather (most of the time), proximity to the flagship University of Texas at Austin, and the incentives of a tax friendly, State of Texas (no personal or corporate taxation).

According to the Austin Chamber of Commerce, there are now more than 100 companies in the areas of research, diagnostics, pharmaceuticals and medical devices. These include Abbott Spine, Arthrocare Corp, Agilent, Alk-Abello, Asuragen, Luminex, Viagen and Zimmer Biologics. Although the University of Texas at Austin lacks a medical school, MD Anderson established a Science Park for basic and translational cancer research in the area.  This reminds me of similar facilities in La Jolla.

The University of Texas at Austin also provides a growing pool of educated workers, and I see the convergence of information technology in drug discovery, as where the many IT graduates with an interest in life sciences, can have an important role to play.  Bioinformatics and computational biology is becoming increasing important in cancer research, for example.

The University, like many others, provides an incubator for technology start-ups that has raised over $725M in funding.  You can read about the important role incubators have to play in the development of biotechnology companies in Christopher Pirie’s interesting article in the MIT Entrepreneurship Review).

However, what cements my view that Austin is an emerging cluster, is the fact that growing start-up companies are now choosing to relocate to Austin, rather than move to more established biotech areas such as Boston or Seattle.  Pain Therapeutics Inc. a San Mateo, CA company announced in October last year they would be moving to Austin by the end of 2011 and planned to hire 50-100 employees in Research & Development.  As more companies move to the Austin area, this trend is likely to continue.

If you are a growing, biotech start-up company, Austin should be on your radar of potential areas to build your business.

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3 Responses to “Austin’s growing and emerging biotechnology cluster”

  1. Mark Fortner

    The Austin biotech “community” has always been this little island biotech in a sea of tech companies. This makes it harder to attract people to the area, since most people want to know that there are other companies you could transition to in the event of layoffs.

    The Houston biotech community is larger than Austin’s, but also spread out. It’s not like La Jolla or Carlsbad where you can’t swing a cat without hitting a startup company. The Woodlands Research Forest community (north of Houston) used to be an area where you had a high concentration of biotech startup companies, but most of them have either been bought (and moved by their new owners to one of the coasts), or imploded.

    The key to most biotech communities is community support. Are there organizations like the SD Biotech Discussion Forum, the SDBN, where you can continue to learn, and network? And is there enough opportunity in the community?

    • Pieter Droppert

      Thanks Mark, for your useful insight into biotechnology in Texas. I agree that Austin’s biotech community is small compared to the tech community, but it is growing and it will be interesting to see what happens in the future. The fact that companies are choosing to relocate here over more established biotech regions is a positive sign about its future viability. I’m not sure the presence or absence of networking groups is key to success of a region, but I’d expect once there is a critical mass of people and companies in the area these kind of groups will become established.

  2. Andy Rouse

    Pieter – great post, I’m glad to see the Austin biotech industry showcased. As a medical device recruiter with many of my clients here in Austin, I’ve seen positive growth, innovation and entrepreneurial trends in emerging and established device companies alike over the past three years. Recent positive publicity (Kiplinger’s #1 city for the next decade, among several others) have rocketed Austin’s national perception as a great place to do business as well as an emerging biotech community – and I hope and expect this will continue for the next few years.

    Mark – I’m glad you brought up the difficulty of attracting talent to the area. There are still challenges, but I’ve seen a marked difference just over the last year in medical device talent willing to relocate to Austin. I’d still like to see us improve our community support, but there are some great initiatives taking hold – such as the Medical Device Action Group, Austin’s Chamber of Commerce BioAustin and their events, among others.

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