As the largest city in the northwest United States, Seattle is probably known less for biotech than it is for aerospace (Boeing), software (Microsoft in nearby Redmond), coffee (Starbucks), and online retail (Amazon.com). But Seattle is a life sciences powerhouse, ranking fifth among US biotech hotspots, beating New York-New Jersey, Philadelphia, and the Washington, DC, regions in an analysis conducted by the Brookings Institution.

Most of the state's 200 biotech companies, research institutes, and biomedical manufacturing companies are located around Seattle and employ nearly 20,000 workers. About three-quarters of the research and biotech activity is concentrated in Seattle's Puget Sound area; the balance, including biomedical manufacturing, is found in Bothell and Snohomish County about 20 minutes north of Seattle.

In addition to a robust biotech industry, Seattle has a few other surprises. One is the weather: Despite the area's reputation for rain, Seattle actually receives less precipitation than New York...

AIRPLANES, COFFEE, SOFTWARE, AND BOOKS

Sean Doyle interviewed with half a dozen universities and biotech companies but chose Seattle-based ZymoGenetics. While his wife had been apprehensive about Seattle's legendary precipitation, both have fallen in love with the city. "We've been pleasantly surprised with the beauty of the area," says Doyle, who holds a PhD in molecular biology from UCLA. The region also enjoys "a good support network with strong research at the University of Washington and at a number of biotech companies."

The engine driving the life sciences in Seattle is its nonprofit research sector, which received more than $730 million in National Institutes of Health funding in fiscal 2003. Nonprofit institutions employ fully half the biotech workforce. Prominent among these are the University of Washington (UW) and the Fred Hutchinson Cancer Research Center ("the Hutch").

UW, the oldest state-assisted university on the Pacific Coast with 35,000 students in 16 schools and colleges, received more than $440 million in NIH funding in fiscal 2003, placing it first among public and second among all US universities. The UW School of Medicine, with a full-time faculty of 1,600, including four Nobel laureates, has particular research strengths in genomics, computational biology and predictive protein structure, and biodefense research. With 770 medical students and 580 grad students in the basic sciences, UW also serves as the regional medical school for the states of Wyoming, Alaska, Montana, and Idaho.

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The Hutch, with nearly 1,600 faculty and researchers, received more than $207 million in NIH awards last year, placing it first among all nonprofit research institutes. Other major Seattle area research centers include the Institute for Systems Biology (ISB), whose 170 scientists study interactions in whole systems rather than single genes or proteins; the Seattle Biomedical Research Institute (SBRI), whose 160 researchers focus solely on infectious diseases; and the Benaroya Research Institute at Virginia Mason, whose 165 researchers concentrate on autoimmune and genetic diseases.

These institutes and others were established largely by former UW faculty who wanted to concentrate their research at free-standing institutes. Leroy Hood, a pioneer in gene and protein sequencing, cofounded ISB in 2000 after having run UW's Department of Molecular Biotechnology for eight years. In 1992 Bill Gates helped lure Hood to UW from Caltech with a $12 million grant that helped fund the new department. The ISB and other research centers maintain strong ties to UW. "There is an unusual propensity for different institutions to collaborate in Seattle," Hood says. "The interaction barrier here is very, very low."

UNIVERSITY AND RESEARCH INSTITUTES

ALLEN INSTITUTE FOR BRAIN SCIENCE (Seattle)

http://www.brainatlas.org

Employees: 35

Science positions open: 9

BENAROYA RESEARCH INSTITUTE AT VIRGINIA MASON (Seattle)

http://www.benaroyaresearch.org

Employees: 165

Science positions open: 7

FRED HUTCHINSON CANCER RESEARCH CENTER (Seattle)

http://www.fhcrc.org

Employees: 2,600

Science positions open: 63

INSTITUTE FOR SYSTEMS BIOLOGY (Seattle)

http://www.systemsbiology.org

Employees: 170

Science positions open: 10–15 over next year

PACIFIC NORTHWEST RESEARCH INSTITUTE (Seattle)

http://www.pnri.org

Employees: More than 100

Science positions open: 2

SEATTLE BIOMEDICAL RESEARCH INSTITUTE (SBRI) (Seattle)

http://www.sbri.org

Employees: 161

Science positions open: 6, but plans to add up to 140 over next several years

UNIVERSITY OF WASHINGTON SCHOOL OF MEDICINE (Seattle)

http://www.uwmedicine.org

Employees: 1,600 full-time faculty

Science positions open: 4 senior and numerous junior faculty

UNIVERSITY OF WASHINGTON HEALTH SCIENCES CENTER (Seattle)

http://www.washington.edu

Employees: 7,000 Science positions open: more than 100

BIOTECHNOLOGY COMPANIES

AMGEN (ACQUIRED IMMUNEX IN 2002) (Seattle/Bothell)

http://www.amgen.com

Employees: 900

Science positions open: 30

BERLEX LABORATORIES (Seattle/Bothell)

http://www.berlex.com

Employees: About 200

Science positions open: 8

CELL THERAPEUTICS (Seattle)

http://www.cticseattle.com

Employees: 360

Science positions open: 3

CORIXA (Seattle)

http://www.corixa.com

Employees: 170

Science positions open: 0

CORUS PHARMA (Seattle)

http://www.coruspharma.com

Employees: 86

Science positions open: 14

DENDREON (Seattle)

http://www.dendreon.com

Employees: 130

Science positions open: 15

ICOS (Bothell)

http://www.icos.com

Employees: 675

Science positions open: 25

MERCK & CO. (ACQUIRED ROSETTA INPHARMATICS IN 2001) (Bothell)

http://www.rii.com

Employees: 305

Science positions open: 25

SEATTLE GENETICS (Bothell)

http://www.seattlegenetics.com

Employees: 120

Science positions open: 11

TARGETED GENETICS (Seattle)

http://www.targetedgenetics.com

Employees: 80

Science positions open: 2

XCYTE THERAPIES (Seattle)

http://www.xcytetherapies.com

Employees: 70

Science positions open: 11

ZYMOGENETICS (Seattle)

http://www.zymogenetics.com

Employees: 401

Science positions open: 18

For instance, most of the faculty and staff at the Hutch have affiliate opportunities at the UW medical school, while UW grad students use Hutch lab facilities to conduct research for their doctorates. The Hope Heart Institute, a prominent cardiovascular research facility in Seattle, is partnering with BRI to form the Hope Heart Program to advance translational research.

"It's this kind of collaboration and cooperation that very much characterizes this region," says Albert Berger, vice dean for research and graduate education at UW School of Medicine.

HOME-GROWN SCIENCE

Like the research community, much of Seattle's biotech industry is locally grown. Many former employees of Immunex, the city's largest biotech (acquired by Amgen in 2002), now work at ICOS, Dendreon, and Targeted Genetics. Some 130 biotech companies, including Merck/Rosetta, ZymoGenetics, and Corixa, use technologies developed at UW, the Hutch, and other local research institutes.

Seattle also benefits from the largesse of two of its wealthiest residents – Microsoft cofounders Bill Gates and Paul Allen. Both have donated millions of dollars to local academia and biotech. Last year Allen donated $100 million to establish the Allen Institute for Brain Science, while Gates gave $70 million to UW to create a genomics research facility.

The Bill & Melinda Gates Foundation has invested $525 million in Seattle-based organizations involved in global infectious diseases, including $222 million to the Program for Appropriate Technology in Health to support vaccine development, and $15 million for SBRI's malaria vaccine initiative. "It's not because they are in Seattle," says Richard Klausner, executive director of the global health program at the Foundation and former director of the National Cancer Institute in Washington, DC. "It just so happens there is an intellectually diverse community and a confluence and convergence of public health research here."

Allen and Gates have also invested millions in several of the city's biotech companies, including ICOS, Corixa, Seattle Genetics, and Dendreon. Bothell-based ICOS developed Cialis (tadalafil), which is now marketed by Lilly in competition with Pfizer's Viagra (sildenafil citrate) to treat erectile dysfunction.

PROS, AND A HANDFUL OF CONS

BUILDING A BUSINESS IN THE SEATTLE AREA

Thinking of starting a biotech business in the Seattle area? First the good news: Ample space is available for wet labs and offices in South Lake Union, a 60-acre redevelopment project in the center of the city that caters to the life sciences. Need lots of space for biomanufacturing? Land is plentiful, and somewhat cheaper just 20 minutes or so north of the city in Bothell and Snohomish County.

More good news: Washington is one of seven states that doesn't assess personal or corporate income tax, so you and your employees will keep more of their earnings (assuming you make a profit, of course). There's no tax on interest, dividends, or capital gains, and the state offers a sales-tax credit on purchases of R&D-related equipment (a 6.5% cost savings), as well as credits for business and occupancy taxes for companies doing research and development.

Now the bad news: Don't look to the government for much more. Unlike other biotech hotspots, Seattle and the state of Washington don't offer much in the way of financial support for commercial enterprises or grants for biotech and life sciences research. "We do not have the kind of financial incentives and grants that some states do," says Susan St. Germain, a senior account executive with the state's Department of Community, Trade, and Economic Development.

Seattle's research institutions are keen on licensing technologies that their prolific scientists develop, but start-up capital is scarce. "Early-stage venture capital is at a premium," says Ruth Scott, president of the Washington Biotechnology and Biomedical Association. "It's very hard to come by."

Nonetheless, the coffers aren't empty. The Washington Technology Center, a state-funded nonprofit, offers a Research and Technology Development grant of as much as $100,000 per year for up to two years. The Washington Research Foundation, a nonprofit originally established as licensing agent for the University of Washington, supports WRF Capital, which invests up to $2 million in companies having strong ties to the university.

Washington state's governor, Gary Locke, supports Bio21, a plan that would make $450 million in public and private funds available for competitive research grants to institutions and companies over a 13-year period. An earlier version of the plan stalled this year in the state legislature, and prospects remain uncertain.

Also on the financing side, Microsoft cofounder Paul Allen runs Vulcan Ventures, a modest-sized venture capital (VC) firm that invests in local life sciences, software, semiconductor, and communications startups. ARCH Venture Partners, a major national VC firm, assembled a $350 million fund earlier this year, half of which will be directed to Seattle-area biotechs.

ARCH and two other national VC firms last year partnered with the Institute for Systems Biology (ISB) to launch Accelerator, a for-profit incubator for emerging biotech companies. The 20,000-square-foot facility, located on the north end of Lake Union, currently houses two companies: VLST, a drug development startup, and VieVax, which is working on platform technologies for rapid vaccine development.

Accelerator has $15 million available for investment and is seeking three to five more companies, says Leroy Hood, ISB cofounder and Accelerator director. "I see this as an enormous opportunity to bring in those technologies and computational abilities that will strengthen and build the vision I have for systems biology," he says. "The Accelerator will be a magnet to bring in companies from outside the region."

That's something that South Lake Union may do as well. Situated about 15 minutes from downtown Seattle and the University of Washington campus, South Lake Union occupants already include Merck & Co.'s Rosetta Inpharmatics, the Seattle Biomedical Research Institute (SBRI), sections of the UW School of Medicine, the Fred Hutchinson Cancer Research Center, and ZymoGenetics, a biotech company.

The project, run by Paul Allen's real estate company, Vulcan Inc., aims to turn the formerly deteriorated light-industrial area into a biotech hub, not only with labs and offices but also restaurants, retail shopping, and even rental apartments that would be affordable for researchers. "We have embarked on a path to create a vibrant life sciences research cluster in South Lake Union," says Ada Healey, Vulcan's vice president for real estate.

By offering an attractive environment for biotech companies from outside the region, "South Lake Union will help Seattle achieve the critical mass and increase the breadth and depth of collaborations among research organizations in the area," says Doug Bassett, director of informatics at Merck. "That kind of synergy really feeds on itself. It's the same kind you see in Boston surrounding Harvard," he says. "We are starting to see it now in Seattle. It's really exciting."

- Ted Agres

For all its strengths, Seattle also has its drawbacks. Unlike many other biotech hotspots, the region lacks a major pharmaceutical manufacturer whose presence would boost employment and attract more business (although Berlex Laboratories plans to open a small drug production facility in Snohomish County in 2007). Washington doesn't offer the range of grants and financial incentives available in other states to foster startups, and early-stage venture capital isn't easy to come by. Industry and state officials are beginning to address these issues, but "we need a comprehensive, statewide bioscience strategy," concedes Ruth Scott, president of the Washington Biotechnology and Biomedical Association

Salaries in Seattle are fairly strong, with biotech employees earning an average of $68,000 and senior researchers making closer to $72,000. Another plus: Washington doesn't have personal or corporate state income tax, so employees and companies get to keep more of their earnings than they would in other locales. That's also helpful when recruiting scientists to the area. "It's like adding 6 to 7 percent to their bottom line," says Bruce Montgomery, chief executive of Corus Phar-ma, which develops aerosol drugs for asthma and cystic fibrosis.

Still, living in Seattle is not cheap. The overall cost of living is 36% more than the national average, and housing prices are 65% higher. This is despite Seattle's general economic slowdown over the past four years, due largely to the loss of about 60,000 jobs after the dot-com bust of 2000 and Boeing's corporate relocation to Chicago in 2001.

In 1996, Fortune magazine named Seat-tle the top US city in which to live and work. This year Seattle received a much different distinction: It was ranked first in Forbes magazine's most overpriced places to live based on its high cost of living, least affordable housing, and modest job and income growth. Local officials contend the housing costs are tied to high demand, as about 25% of residents are in professional positions that command significant salaries. When compared to other major biotech hotspots, Seattle's living and housing costs are actually among the more moderate.

ECLECTIC CULTURE

Seattle is also known for its distinctive neighborhoods and range of music, from independent rock to classical, as well as abundant coffee shops and bookstores. The city is home to the acclaimed Seattle Opera and the century-old Seattle Symphony. In addition to several world-class art museums, the Seattle Center features the landmark Space Needle, developed for the 1962 World's Fair, as well as Paul Allen's Experience Music Project (EMP) and Science Fiction Museum, which reflect Allen's own eclectic tastes. The EMP runs the equally eclectic radio station KEXP in partnership with UW.

Like many cities, this caffeine-fueled locale suffers from rush-hour gridlock. Commuting can easily take 45 minutes, especially when inching one's way across the Evergreen Point Floating Bridge that connects Bellevue and Kirkland to the university district and downtown. But Seattle's robust scientific community, culture, and gorgeous outdoors more than compensate for the rain, traffic, and housing costs. "This is one of the most beautiful, breathtaking cities anywhere," says Klausner. "After living on the East coast all my life, I'm a convert to this environment. It's overwhelming to live in a place of such natural beauty."

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SEATTLE

BOSTON

WASHINGTON, DC

NEW YORK, NY

NATIONAL AVG


FINANCIAL

AVERAGE SALARY*

Senior Researcher

$71,810

$75,500

$75,000

$72,500

$73,000

Intermediate Researcher

$48,640

$58,250

$55,000

$50,300

$50,335

Postdoc

$40,960

$38,000

$40,099

$39,000

$37,233

OVERALL COST OF** LIVING (US avg = 100)

135.7

183.9

158.2

260.3

100

MEDIAN SINGLEFAMILY HOME SALES PRICE

$282,500

$347,100

$300,700

$368,700

$170,800

STATE SALES TAX (%)††

6.5

5.0

5.75

4.25

4.8

STATE INCOME TAX (% low/high brackets)

0

5.3/5.3

5/9.5

4/7.7

2.02/5.17


QUALITY OF LIFE+


Annual precipitation (in.)

38.3

42.5

43.7

44.4

37.9

High temperature in July (°F)

74.5

82.2

88.9

84.7

86.5

Low temperature in January (°F)

36

22.1

24

26.5

27.8


ACCESS TO CULTURE & SERVICES (within 30 mi. radius)


Restaurants

3,521

4,759

5,514

21,987

2,405

Bars

257

238

94

1,401

202

Movie theaters

62

42

53

173

26

Libraries

141

343

499

866

101

Theatrical productions

123

175

222

1,109

77

Museums, zoos, arboreta, etc.

17

28

31

55

14

Medical and surgical hospitals

70

130

141

512

114

Colleges, universities and professional schools

9

40

22

99

18


CRIME AND ENVIRONMENT


Personal crime index (avg US = 100; lower is safer)

148

234

426

193

100

Property crime index (avg US = 100; lower is safer)

246

190

196

112

100

Air pollution index (avg US = 100; lower is cleaner)

108

104

94

112

100

Superfund sites (fewer is better)

10

4

0

1

3

* The Scientist "Annual life sciences salary survey," Sept. 27, 2004 and "The state of scientists' salaries," Sept. 22, 2003. Seattle figures are computed based on 2003 data adjusted for inflation (Seattle CPI = 2.4%) ** Salary calculators from Homefair.com, MSN House & Home, Sperling's Best Places National Association of Realtors Median Sales Price of Existing Single-Family Homes, 1st Quarter 2004 †† Does not include city or local sales taxes + CNN/Money: Best Places to Live, OnBoard LLC, Applied Geographic Solutions

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