These days, it seems everyone wants to get on Amgen Inc.’s good side. Just last month, the Pennsylvania legislature pushed through tax breaks and other incentives intended to attract biomedical companies and drug makers to that state. Lawmakers weren’t shy about what company they wanted first. “Amgen is exactly the type of company that we want in Pennsylvania,” said Pennsylvania Gov. Ed Rendell, after signing the legislation. “It’s our hope this (investment will) be able to persuade Amgen to put more and more of its manufacturing and its (research and development) into Pennsylvania.” The effort by the Keystone State is a prime example of the growing number of municipalities looking to lure the blockbuster Thousand Oaks drug maker to their areas. Among those reportedly wooing the company are such unlikely areas as St. Louis, Florida, Wisconsin and Buffalo, in addition to more established biotech centers like North Carolina and Seattle. For many, the prospect of bringing in a big name, big-earning biotech firm like Amgen is seen as a ticket to future financial stability, setting off a domino effect in which more biotech companies move into the area. Amgen is a good company to start with: the company has the money it earned $3.7 billion last year on revenues of $12.4 billion and an urgent need to expand outside its 26-year-old Thousand Oaks campus, where space is increasingly tight. As a result, the company in recent years has steadily ramped up its expansion efforts by acquiring operations and expanding into Rhode Island, Seattle, South San Francisco and, most recently, Longmont, Colo. It now has 11 U.S. and 30 overseas operations. With such a track record of multimillion-dollar expansions, it makes sense that municipal governments are more than willing to step in and play host to future Amgen projects, said Ahmed A. Enany, president and CEO of the trade group Southern California Biomedical Council. “The assumption is that you’re attracting industries that play a measure in economic development,” he said. “Life science is one of the industries that everybody is after in the United States.” Enany said municipalities are drawn to the biotech industry because it is clean, offers high-paying jobs and brings in an educated and often affluent workforce that will spend money. Biotechs, meanwhile, are attracted to less developed areas because they are often cheaper to construct projects in than in California, traditionally the hub of the biotech industry, and have eager governments willing to shell out tax breaks. The lower cost of living can also be a draw to the highly specialized pool of workers usually favored by the companies. “That may provide them access to resources they don’t have,” Enany said. Meal ticket Tax incentives were one reason Amgen opened its first production facility in Puerto Rico in 1993. Today, the plant employs 2,500 workers producing the bulk of the company’s Epogen, Aranesp and Enbrel drugs and is credited with bringing $2 billion in investments to the local economy. It has also helped turn Puerto Rico, which had a nascent pharmaceutical industry in the early 1980s, into a major biotech center, with Eli Lilly and Abbott Laboratories both staking claims on the island. “That is a credit to the workforce,” said Enrique Mirandes, director for life sciences of the Puerto Rico Industrial Development Corp. “We’re seeing a transformation on the island.” Of course, Puerto Rico has the benefit of being both a U.S. territory while being situated outside of federal tax jurisdiction. On top of that, the government, like Pennsylvania, has put into place an aggressive tax incentive program. “These companies can use the money saved to fund other operations around the world,” Mirandes said. “This has helped to grow the interest of these companies. Operations that used to be conducted in California are now going on on the island.” Pennsylvania is hoping to mimic such success through its own tax programs. “This is a major tool in our arsenal in attracting companies like Amgen to the commonwealth,” said Kevin Ortiz, a spokesman for the Pennsylvania Department of Community and Economic Development. “We’re at a point right now where we’re positioning ourselves to become a life sciences hub.” Too early to tell Despite the growth, Amgen has been in a rough spot lately. A pair of research reports last month revealed that those who took higher doses of Amgen’s anemia drugs were more prone to strokes or heart attacks. And this month, Amgen officials are testifying before Congress about safety issues related to Epogen and Aranesp. For the moment, though, Amgen appears poised for further expansions, although spokeswoman Sarah Rockwell said the company won’t comment about specific plans, “The company is always looking for continued growth,” she said. Rockwell said the company has a long list of standards a site must have to attract an Amgen operation, including the business climate, infrastructure and, most importantly, the correct type of workers. “It’s got to be a skilled labor force. What we do is pretty specific,” she said. Areas that have those elements will have a leg up, Rockwell said. “We have to look where that criteria is easier to fill,” she said. While Rockwell would not pinpoint exact sites, she did confirm that among those under consideration was Pennsylvania because, she said, the company already has a distribution plant in Louisville, Ky. When asked about whether the tax breaks signed by Rendell had any influence, Rockwell acknowledged the incentives are eye-catching. “Tax breaks certainly make Pennsylvania an even more attractive state to be doing business in,” she said. She was clear that no decision has been made. At the same time, Rockwell was adamant that Thousand Oaks would remain the company’s headquarters. The previous expansions have ignited fears that the city’s largest employer was pulling up stakes. That’s not the case, Rockwell said. “Even though there’s been a lot of talk about expansion and certainly most of the growth the company does will be outside Thousand Oaks, we are still committed to the Thousand Oaks community,” she said. “It’s our headquarters and there’s no plan to change that.” Enany, the official with the biomedical council, was less charitable, saying that such expansions only make sense for a company the size and complexity of Amgen. “It is natural as they have alliances all over the place to branch and have operations where it suits the business. It’s becoming a multinational successful company,” he said. “Of course, not all of them have equal chances of attracting a company like Amgen.”
