A nice juicy corporate expansion is just what we need right now to kick the recession blues. And we may be poised to get just that in Cambridge, ground zero for the life sciences industry, one of the Bay State’s best hopes for job creation in these still-tough times.
Sanofi-aventis is on the prowl for a sizable block of lab space in the Cambridge market, real estate industry executives say. Better yet, the big French drug giant is thinking big here as it scours the local real estate market, with budding plans to make Cambridge its worldwide cancer research center, according to both real estate and biotech industry observers.
In a state that has taken its lumps in the Great Recession, that could mean lots of new, well-paying jobs and hundreds of new hires.
In fact, after years of layoff announcements and endless corporate bloodletting, it could end up being biggest expansion since Novartis AG rocked Cambridge in 2002 when it unveiled plans to move its global research headquarters to Kendall Square, helping pull the Bay State out of another slump.
The fact is, good news, like bad news, can be infectious. And right now we are mired in a bad news cycle – miserable job market, tough housing numbers, troubled office towers – even as the facts on the ground are starting to slowly but surely shift. Sometimes it takes a catalyst, or a big announcement or two or three, to help start turning those perceptions around.
“Sanofi-aventis is yet another example of an international company looking to tap into Cambridge’s intellectual capital,” said John Osten, a senior vice president at Jones Lang LaSalle and an expert on the Kendall Square lab market.
On The Hunt
Working with a Washington, D.C.-based broker, the French drug and research giant is on the hunt for anywhere from 75,000 to 150,000 square feet of lab and office space, real estate industry observers say.
Sanofi-aventis appears to be focusing on Cambridge, though there was a brief flirtation with a building in neighboring Watertown, according to one broker.
To date, the company has been fairly utilitarian with its real estate, holing up in rehabbed lab space in Kendall Square for most of the past decade.
Whether Sanofi-aventis takes down some newer space, sticks with less expensive rehab space, or has life sciences real estate developer Alexandria roll out a glitzy new building, remains to be seen.
But what is fairly clear is that Sanofi-aventis is weighing plans that could dramatically raise its profile in the crucial Cambridge biotech hub.
The pharma giant, which employs 15,000 across the U.S., could hire as many as another 500 scientists and other employees as it expands its Cambridge operations, according to one life sciences industry source.
“That is definitely big,” said one veteran Cambridge broker of the French company’s potential expansion plans.
The maker of such hit drugs as Ambien and Plavix, Sanofi-aventis currently has four research centers across the country, including its U.S. headquarters in Bridgewater, N.J. The others are in Cambridge, Malvern, Pa., and Tucson, Ariz.
If that’s the competition to become the drug maker’s worldwide cancer headquarters, then Cambridge has it made.
There are other positive signs as well. Sanofi-aventis was recently in the market for a top public relations executive to spread the news about its global oncology research group. Of course, as you guessed, the position will be based in Cambridge.
In addition, the international pharma giant also recently agreed to chip in $500,000 over two years for an investment fund aimed at providing crucial capital to young biotech companies in Cambridge and across the Bay State. The quasi-public Massachusetts Life Sciences Center manages the fund, which gives drug giants a sneak peak at some of the hottest new emerging research and potential drugs in our local market.
A ‘Must-Be-In’ Market
Meanwhile, other big pharma players will also soon be on the prowl again in the Cambridge market.
The downturn saw a surge in merger and acquisition activity in the industry, with giants gobbling up giants. Look no farther than Merck & Co., which has a big Boston research campus, which is the process of incorporating Schering-Plough, which has substantial offices across the Charles in Cambridge.
As these giants wind down their M&A activity and digest their new acquisitions, they are likely to start turning their attention again to expanding their research and lab capabilities in various “must-be-in” markets like Cambridge, industry experts say.
A word of caution here, though.
Yes, if Sanofi-aventis ends up pulling the trigger on a Cambridge expansion, it will be the biggest thing since Switzerland’s Novartis set up camp across the Charles.
But its plans still appear to be in flux somewhat, with its overall space requirements not set in stone.
Either way, it will have a hard time rivaling what the Swiss firm has done in Cambridge. After hitting the ground running with a sizeable 250,000 square feet block of space nearly a decade ago, Novartis has steadily expanded and now controls well more than a million square feet of lab and office space in and around Kendall Square.
And it’s still growing, out there alongside Sanofi-aventis hunting for more space.
Yet Sanofi-aventis is likely to be big news in its own way, a tangible sign that the Bay State’s increasingly knowledge-based economy is on the march again.
And this may be just what the doctor ordered for Gov. Deval Patrick, who faces a tough reelection campaign this fall against a strong Republican opponent – as well as State Treasurer Tim Cahill and his quixotic bid as an independent – amid what has been a stinker of an economy.
It was Patrick, after all, who took the heat a few years ago for putting aside $1 billion to spur expansion by the state’s life sciences industry.
Maybe now that big bet is starting to pay off.
