Reinventing The Classic Pharma Campus

By Louis Garguilo, Chief Editor, Outsourced Pharma

Perhaps your company is located on, or considering expanding to, a biopharma or life-sciences campus. Ever wonder how these “campuses” (or “parks”) materialize?

These are the sprawling, modern amenities-laden properties with leafy accoutrements, shiny cafeterias and the like. They are often established on former Big Pharma sites that have been refurbished, and offer biopharma-utilities-supported labs and facilities ready for your leasing.

Jason Benson, Managing Director, JLL Life Sciences Real Estate Solutions, focuses on assisting biotechs in taking advantage of these properties. He’s been in the business for a decade, and tells me campuses originate with “some strong value propositions.” 

Benson specifically works the greater New Jersey area, which historically has been a thriving market for pharma. Today, though, it’s investments like those described above that helps propel a renewed growth in the area.  

“Typically, here in New Jersey, the renaissance of existing but defunct biopharma campuses starts with, for example, a Big Pharma that no longer needs a location and looks to sell it as a way to derive some final economic worth,” Benson explains.

As most readers are aware, this divestiture has been in process for quite a while – a process, by the way, that in part has been another driver in our contract development and manufacturing industry over the years.

Today these “complex locations and facilities” that once benefited from years of pharma investment are of increasing interest to a variety of real estate concerns and other investors “willing to make the upgrades necessary to lease to multiple biotech-industry companies,” says Benson.

These upgrades are the “re-imagining of biotechnology innovation parks” across the United States. They include a mix of service providers such as CDMOs, as well as a variety of emerging and established biopharma companies.

Benson says nowadays leases at these campuses are driven in large part by cell and gene, RNA, ADC, and other specialty-focused biotechs, and on the other side, it’s not always traditional real-estate entities purchasing the campuses.

For example, Pfizer sold its 174-acre, 30-building campus in Ann Arbor to nearby University of Michigan. Today, the North Campus Research Complex is a bustling hub of interdisciplinary research and public-private partnerships advancing lifesaving treatments.

Closer to home for Benson, it was a regional private investor, Onyx Equities, that recently announced it purchased the expansive Merck Kenilworth site (more below).

“Onyx is a large investor here in the tri-state area,” says Benson. “However, like many others, it is not as nationally known.”

And so campus life, if you will – once the denizen of Big Pharma employees – has become home to pre-revenue and smaller clinical-stage companies.

Nowadays, where you work in the biopharma industry might very well be determined by which “campus” your organization alights within.

And your neighbor, by the way, might be your CDMO.

CDMO Campus

Benson says CDMOs can play a seminal role in the creation of these campuses.

Today, he estimates 50% of the clients he is assisting with their facility strategy are pre-revenue biotechs, 25% CDMOs and CROs, and 25% revenue-generating biopharma.

Regarding the service providers, he says, “these campuses provide unique opportunity for immediate, additional space for their growth.”

“Our campuses interest CDMOs because of Big Pharma's prior investments, and thus the avoidance of large capital investment.”

There’s also the ability to grow at scale, and become a part of an ecosystem that includes biopharma customers, and pools of skilled workers.  

Benson says he works with all sizes of CDMOs, from the big name brands (Thermo Fisher, Catalent, Pantheon, Resilience come to mind), to smaller groups coming out of the E.U. or Asia-Pacific trying to establish themselves in the U.S.

International activity has increased appreciably over the last 12 to 18 months. Some of that, Benson believes, may be driven by some biologics now coming off patents, enticing biosimilars-focused manufacturers to set up here.

Does Benson and company start out be recruiting CDMOs?

“Initially,” he says, “we may reach out to the larger CDMOs, the bigger biotechs, and even pharma companies that can take a large block of space.”

He mentions the Merck Kenilworth campus just getting underway – a 2 million-square-foot site rebranded as NEST – Northeast Science and Technology Center. Economically, a site of this size needs an equally sizable tenant to anchor the campus “to kind of kickstart things.”

And as we mentioned above, large targets to do the kickstarting can be regional healthcare networks or “science-based universities.”

“These health-care related organizations – with the funding – can play that vital role as anchor tenant,” explains Benson. Not only can they fully utilize a a large slice of the existing infrastructure, “they bring life, or a certain energy, into the campus.” And these are the creators of current jobs as well as a future workforce to serve new tenants.”

Which Campus For You?

Benson says a major change percolating through the clinical-stage biopharma industry is the willingness to look outside “a tier one market.”

In other words, he believes there is a concerted interest in locating outside of Boston, San Francisco, San Diego or RPT in North Carolina.

“The competition for talent has gotten to a point where biotechs recognize the accessible talent exists in what I would call a tier two market, like a New Jersey, or a Boulder, Colorado. (see: Building In Boulder – A Biotech Finds A Manufacturing Base)

Benson has picked up on increased activity in the southeast and southwest, for example, and mentions Texas specifically. 

Biotechs are thriving across the U.S., he says. Part of that is because they can attain and hold on to skilled workers when locating within a new campus, one where the initial cost of real estate is lower than tier one locations, and that translates to lower rents.

“A decade ago, the focus was always ‘How do we get into Boston and Cambridge?’” Benson says. That sentiment was primarily driven by the thought you needed to be in these biotech hubs to get investor interest.

Instead, investors today assist in the building of campuses that grow assets throughout the U.S.

We are re-imagining ourselves – service provider and sponsor alike – within the shadows of an industry model whose time may have passed.