There was a recent article in the New York Times, “Rare Mutation Ignites Race for Cholesterol Drug,” about a potentially super drug to lower LDL in patients with stubbornly high cholesterol that the major pharmaceutical companies are racing against each other to develop. The scramble is based on successfully synthesizing a rare gene mutation from people with remarkably low LDL levels – lower than 20. With so many people taking statins each day to control cholesterol, the worldwide market potential of a super LDL lowering drug is enormous, and so are the stakes for pharmaceutical manufacturers in getting their version of the drug to the FDA for approval and the green light to take to market.
Amgen is one of the companies engaged in this pursuit, and its Rhode Island facility in West Greenwich is one of three Amgen facilities that have been designated to manufacture the drug, which has already been produced and is currently undergoing patient trials. The West Greenwich facility is being readied to produce the drug in enormous quantities. To illustrate the production scale planned, the article mentioned that with other drugs under development, antibody cells would be housed in a glass flask in a research laboratory, whereas with this super LDL lowering drug, the antibody cells are grown in a “stainless steel tank nearly the size of a fuel tank on a semi truck.”
I bring this up because as our state struggles with the fallout from the 38 Studios disaster and we bite our lip in making a first $2 million payment on the $100 million+ we will have to pay back over the next decade, Amgen represents an earlier gamble on economic development that has paid off handsomely. Or rather, Amgen represents a sane and prudent investment that the state made in attracting an established biotechnology manufacturer to locate here as opposed to a start-up video gaming company run by an ex-baseball player with star power.
Amgen built a $70 million facility with 500,000 square feet of manufacturing, administrative and laboratory space that today employs almost 1,000 people, many of them native Rhode Islanders or skilled individuals from elsewhere who are now living in the Ocean State because of their employment at Amgen RI. In contrast, 38 Studios was tasked by the state, in return for the $75 million given to the company, to ramp up employment at a crazy rate that had nothing to do with their staffing needs or their ability to absorb them. Plus, the company only leased the offices in the former Blue Cross building it operated in so briefly.
The very same EDC that threw caution to the winds with 38 Studios negotiated a deal with Amgen that provided tax credits and other incentives to come here, as every state has to do to capture new capital investment. Rhode Island did the same thing with Fidelity to bring the financial services giant to Smithfield, another solid success. It’s so obvious now how big the divide is between bringing an Amgen or Fidelity to Rhode Island than it is to throw $75 million at a fledgling video gaming company whose products – not that 38 Studios even had a single product when we inked the deal with them – target teenage boys.
What’s even more bewildering is the fact that securing Amgen and Fidelity was accomplished during the first administration of Governor Don Carcieri, a former banker and Cookson America executive, while 38 Studios came about in the waning days of his second administration. How could much the same folks – to include the EDC board and the legislative leadership – abandon the thoughtful approach that landed Amgen and Fidelity to jump after 38 Studios and an industry – video game software development – that is well understood to be high risk? And especially after our Bay State neighbor, offered the same carrot, passed on it.
This kind of erratic behavior by Rhode Island leaders has been noted by credit rating agencies and gets factored into the state’s dismal business scores. 38 Studios proves the wisdom of a more rational, realistic economic development approach based on fundamentals and risk measurement – the kind of process we engaged in with Amgen and Fidelity – as opposed to a wink-wink crapshoot.
Rhode Islanders should wish Amgen the very best in winning the LDL super drug race. It will be good for Rhode Island, good for Amgen, and good for all individuals who have cholesterol issues. Plus, if you own Fidelity or other mutual fund stocks that are invested in Amgen, you’ll make some money!