The Baker administration is taking a hard look at the state’s strategy of luring life science companies with millions in tax breaks and grants, prompting anxiety among some biotech executives who fear any changes will mean less money for industry.
State officials are “questioning things like the level of incentives” used to court biotech and pharmaceutical companies, Jay Ash, secretary of the Executive Office of Housing and Economic Development, said in an interview last week.
The Massachusetts Life Sciences Center awarded more than $27 million in grants, loans, and tax incentives in fiscal year 2014 to 39 companies in the state. But Ash noted that Massachusetts can also woo companies by talking up the brain power and infrastructure available here — not to mention the energy of innovation hot spots like Cambridge.
“We’re not competing based on how big of a check we’re going to write,” Ash said.
Governor Charlie Baker has dropped talk of consolidating the Life Sciences Center with the state’s other economic development programs. But Baker still has a significant opportunity to reshape the agency — starting with the appointment of a new chief executive in the coming days.
State officials say they’re exploring ways to streamline the center’s work. They’re reevaluating its spending on capital projects. And they’re thinking about new ways to attract companies to regions of the state that have not benefitted from the boom in life sciences in places like Kendall Square.
Baker and legislators have also trimmed funding for the Life Sciences Center. It’s slated to receive a maximum of $95 million this fiscal year for its investment fund, capital budget, and tax-incentive pool, down from the $105 million it spent last year. Angus McQuilken, a spokesman for the center, said the agency is “grateful” for its funding and “has built a very strong partnership” with the Baker administration.
But some biotech executives are anxious.
Baker declined to send a high-profile delegation to the industry’s national convention this summer in Philadelphia. Deval Patrick often worked the convention floor in person when he was governor.
“The life sciences community senses some hesitation and some lack of commitment of the administration to that sector,” said JC Gutiérrez-Ramos, chief executive of the Cambridge startup Synlogic Inc. and a former Pfizer executive.
Gutiérrez-Ramos, who sits on the scientific advisory board of the Life Sciences Center, said the administration has been “a little bit tentative” in its support for early-stage biomedical research, an attitude he fears could hurt the state’s ability to compete with other regions of the country that are avidly recruiting biotech companies.
Gutiérrez-Ramos hasn’t spoken with any senior administration officials about his concerns, but others have — especially in the spring, when the administration floated the idea of consolidating the Life Sciences Center with other agencies.
“We’ve heard from more than one company that was concerned that what we were thinking about doing was reducing our commitment to life sciences,” Ash said, “and what we’ve said to them universally is, no, it’s just the opposite.”
Ash has driven home that message at his appearances at industry events this summer. “Joined by gr8 leaders in championing life sciences in MA!,” Ash tweeted in July, posting a photo from a celebration in Kendall Square hosted by Takeda, the Japanese drug maker.
In June, Ash headlined a panel on biomanufacturing hosted by the Massachusetts Biotechnology Council. He also accompanied Baker to a gala at the Museum of Science celebrating the 125th anniversary of the German pharmaceutical company Merck KGaA’s presence in the United States.
Ash likes to use an analogy familiar to biotech executives when he tries to assuage their concerns about the administration’s interest in tinkering with investment and recruitment policies. “I’m an economic development scientist. The governor is the CEO of the economic development scientists,” Ash told a gathering of industry big shots at the annual meeting of the Mass Bio trade group in March. “As scientists, our job is to show up and question everything that’s been done before us.”
That message is resonating in some biotech circles. Robert Coughlin, chief executive of Mass Bio, said he was “extremely confident” that the Baker administration is committed to promoting innovation in the industry.
The state’s big life sciences push started in 2008 when then-governor Deval Patrick won approval of a decade-long, $1 billion initiative to grow the sector through capital spending, investment incentives, and operating funds for the Life Sciences Center. There are three years remaining on the plan.