Why do we have hub cities?

[Nate W.]

I think what is driving this from an employee perspective is the thinking "if I lose my job, where is the most convenient place to find a new job w/o much disruption to the family, especially if I have a house."

Here is a story about recruiting in a non-hub location (Florida):

http://www.heraldtribune.com/business/2 ... h-startups

I am wondering if there is industry data that shows if a biotech is started in a non-hub it is more likely to fail than one started in a hub city.

DX,

Further, I am curious if these factors drive the overwhelming interest in medical affairs (or technical sales) among life science graduates that want to live someplace else besides a hub location; due to affordability, family, taxes, etc.

Strictly from a monetary point of view why would a VC pay more money in operating expenses for a company that doesn't generate revenues and is already cashed strapped. You are sucking off potential profits if the company is successful and you are accelerating the burn rate of cash that could be spent on something really expensive; e.g. clinical trials or manufacturing.

Doesn't the VC and angel investor have a fiduciary obligation to their accredited investor to make sage decisions?

[PACN]

It seems to me that another factor is that many start ups do not intend to take products all the way through clinical trials. They are looking to get something started then sell it to big pharma or biotech to take the rest of the way. So not only are things like health care markets and clinical trials not necessarily a concern to them, being local to some of those big pharma companies they are targeting (which are themselves concentrated in hubs) is a big plus.

[Abby]

Ok, so folks here have opinions on why hub cities exist. So what do those of us trying to have science careers (not just PhD) in Non-Hub cities do?

[Dave Jensen]

Ok, so folks here have opinions on why hub cities exist. So what do those of us trying to have science careers (not just PhD) in Non-Hub cities do?

I'm writing about this now, Abby. It's a very good question -- and a quite logical next step for the discussion started by Nate.

My next month's article will cover this topic. I wrote about it once before, in a piece about the "backwoods of biotechnology." But the subject has changed a great deal, so I won't bother linking that one for you because I think you'll get more current (and better) advice by frequent posters in our community on the Forum. That original piece is about 20 years old. As you know, we archive things around here!

I'll come back and post when the new article on that topic is up on the SC.org website. In the meanwhile, what region are you in, and what is your general job category, and perhaps we can customize your advice a bit more specifically?

Dave

[Nate W.]

It seems to me that another factor is that many start ups do not intend to take products all the way through clinical trials. They are looking to get something started then sell it to big pharma or biotech to take the rest of the way. So not only are things like health care markets and clinical trials not necessarily a concern to them, being local to some of those big pharma companies they are targeting (which are themselves concentrated in hubs) is a big plus.

That's a great point. There are many of these start-up early stage therapeutic companies even in Texas. These companies are bare bones operations that are VC backed and burning through a limited amount of money. These are risky endeavors and often fail. Typically, investment decisions are made by non-scientists; often they don't vet the science! If one of these companies does discover a compound that ameliorates a disease state or solves a medical problem and shows efficacy and safety in the initial clinical trials (phase 1-2), the investors are then going to sell the IP and equity shares of the company to Pharma. Pharma mostly does the marketing and manufacturing of the drugs (not the R&D). However, these VC backed early stage companies are a pure bet (often with poor odds) and only monetarily benefit the investors with equity shares. Even if the company fails, the accredited investors of the VC just write it off to lower their taxable income. These companies can out-source the clinical trials and manufacturing (e.g. Quintiles and PPD) remotely. However, they often can't afford more than 1-2 rounds of clinical trials.

With that said, maybe if these companies were in a hub, they might be more sustainable due to the access of capital and other funding sources. It is always about the money.

[D.X.]

Hi Nate,

Regarding your question on hub vs non-hub cities/Areas attracting and retaining "field-based" staff, in my experiences it has been function of an individual's Age and stage. In my experieces I can talk to Medical Liaisons, the majority of those who have choosen to be nearly career-long MSLs in non-hub Areas have been related to Age and stage. They have Kids, they are rooted. Initially the Job may have been attractive to get into the industry but then life happened, many went from being single, to DINKS (double income no-kids couples), to having Kids and well staying in the field and where the lived, was a priority to them. Some with Kids or some DINKS i knew, did move away from non-hubs or between hubs to go in-house Medical Affairs roles and advance in career (like me) but in that case, they for personal reasons, were geographically flexible, they were willing to sell their houses and take on a new experience both in career and Family. Some have willingess to do that. So its very individual Nate. And Age and stage Plays a role.

As for what is a scientist to do in a non-hub City as Abby asked, well the answer is Network, Network, Network. That's it. And if you happen to find your self in a Company without your next local opportunity identified (with a readiness to leave) well to be blunt the answer is Keep your head down and shut up. As you have no other choice. To share a joke with you, you can start to rationalize your compensation in Terms of what you are paid for, 50% is for the pain, 30% is for the guilt, and 20% is to shut-up. Well maybe that 20% shut-up portion of you salary can become 30% to 40% depending on the Situation and lack of geographic flexiblity. So a joke but somewhat reality. That 20% shut up also increases as you climb and find yourself in a spot where the air becomes thin in Terms of Management Level and Job availablity but thats another Story. You may also Change your view and look to the good of the current role you have, maybe the Quality of life you have is worth keeping quiet.

I also agree on PACNs comment, only to add you don't Need to be local but being in a hub also makes you attractive, not only to start-ups but for well established pharma companies, when you see them start moving a HQ, i.e to say Kanton Zug in Switzerland (a hub and home of <8% tax rate and Mailbox address companys)..then hmm..hmmm....what's going on here?! "Whose buying us?" becomes a very very very relevant question.

DX

[Abby]

Thanks for the next article topic, Dave. Looking forward to it.
I'm lucky to be pretty secure in my little niche with a good company. I'm a M.S. biologist in Diagnostics in Colorado. Definitely a tiny pool but we do rewarding interesting work. I think the pressure to find the next thing is a little different for <PhD versus PhD+ folks. But networking is good advice for everyone

Dave Jensen wrote:

I'm writing about this now, Abby. It's a very good question -- and a quite logical next step for the discussion started by Nate.

My next month's article will cover this topic. I wrote about it once before, in a piece about the "backwoods of biotechnology." But the subject has changed a great deal, so I won't bother linking that one for you because I think you'll get more current (and better) advice by frequent posters in our community on the Forum. That original piece is about 20 years old. As you know, we archive things around here!

I'll come back and post when the new article on that topic is up on the SC.org website. In the meanwhile, what region are you in, and what is your general job category, and perhaps we can customize your advice a bit more specifically?

[Nate W.]

Ok, so folks here have opinions on why hub cities exist. So what do those of us trying to have science careers (not just PhD) in Non-Hub cities do?

Abby, you ask a great question for which I don't have a good answer. Biotech in Dallas is about as dead as petrified wood. I have explored and even knocked on doors of failed biotechs here as well as talked to the Chamber of Commerce about biotech companies. I know who has funded these companies and talked with them about why they weren't successful. So I have a good understanding of this issue (consolidation into hub cities) and why jobs aren't created. This started out as a project of mine to understand why so many biotechs have failed in Dallas from business and funding perspective; it has been insightful and sad. However, it has given me some insights into how to direct my career in the future whether I stay or leave Dallas.

The evolution of your question should take two parts:

1) If one lives in a non-hub area and doesn't want to leave for any reason, what local options exist for life science graduates and what can they do to compete for jobs locally (that utilizes their scientific training)?

2) If one lives in a non-hub area and does want move to a hub city, how can they market themselves and network more effectively while living in the backwoods of biotech?

These are tough questions. The obvious answer to this dilemma is to say, "go back and get a clinical degree and move to the suburbs." But not everyone can afford this option. So I'll let the resident expert, Dave, try to address these questions.

[Dave Jensen]

Thanks Nate.

I'm trying hard to make my answer something more than "network, network" but in DX's case that advice (classic as it is) comes across as sensible and correct. There ARE some other options. I'm trying to think of those right now, just as Abby is.

Colorado is a good example of one of the problems, not a solution. That is, it's a great State to live in for reasons that have nothing to do with work. You enjoy your life when you live there -- you have options outdoors to hike, climb, bike, ski and everything under the sun. It's the kind of place where companies can build up a presence (Amgen) and then lay people off, and the entire group of laid off people start driving cabs instead of going elsewhere and relocating for work. I don't have a quick answer. I'll talk to some experts and incorporate that advice into my column,

Dave

[D.X.]

Thanks Nate.

I'm trying hard to make my answer something more than "network, network" but in DX's case that advice (classic as it is) comes across as sensible and correct. There ARE some other options. I'm trying to think of those right now, just as Abby is.

Colorado is a good example of one of the problems, not a solution. That is, it's a great State to live in for reasons that have nothing to do with work. You enjoy your life when you live there -- you have options outdoors to hike, climb, bike, ski and everything under the sun. It's the kind of place where companies can build up a presence (Amgen) and then lay people off, and the entire group of laid off people start driving cabs instead of going elsewhere and relocating for work. I don't have a quick answer. I'll talk to some experts and incorporate that advice into my column,

Dave

Hi Dave,

Since you mentioned the name (Amgen), i'll jump on. That's also the situation in Thousand Oaks, it's Global HQ. They do have a hard time attracting employees to move there but when they do, well many have described themselves as Feeling "trapped" or "on an Island" industry wise and linked to desire for career next step, be it lateral or upward movement. There is one other choice - that's Baxter in a town near by (Westlake Village), so on the commerical and some R&D functions you'll see movement between the two.

Sure its Southern California but where that Location is, if you get a Job in San Diego (a biotech hub) or S.F., then that's a move.

So for the Company, at least in Amgen's and Baxter cases for that Location, there is a huge upside....employee Retention!!

Now I know Folks who've been at that Thousand Oaks/Westlake side for years and years at the same Job rank (middle Management). For what ever reasons they have not found the next step but in light of compensation, Quality of life, etc. they are able to "trade-off" some forms of career advancement, with willingness to "Keep their heads down", i.e. "shut up", and do the Job that is required for exactly that trade-off. They are reluctant to move, generally they have families and are "happy" wit thier outside work life.

So a great Retention tool being in a non-hub though for not necessarily the right reasons. Especially if Management is Aware of your personal situation (i.e. you're trapped) and trust me on this, they'll leverage that - Keep you where they want you.

We talk about hub and non-hub, but alot of this conversation also applies to hub-Areas were supply, outweights demand - you can find similar situations of Folks keeping thier heads down, making those trade-Offs in interest of their outside work life (i.e. Family). Those as noted, risks of not finding a Job is lower, though the risk still exists - I can think of one other advice than Networking.... be entrepreneural and start a Company servicing an outsourced Need that non-hub Company may have. i.e. a medical writing Service? or a supply chain logistics Service, or i don't know ..blue sky thinking here - with the aim to leverage you contacts in that Company to give you Business. Enter Networking again.

DX