Lehigh Valley’s Life Science Sector Hits a Growth Spurt
By Nicole Radzievich Mertz on March 30, 2021
Lehigh Valley’s life science sector is in a growth spurt.
In the last two years, Lehigh Valley companies have undertaken projects that will add or have added at least 1.3 million square feet of space related to the life science sector in Lehigh and Northampton counties, according to a recent Lehigh Valley Economic Development Corporation (LVEDC) analysis.
Consider U.S. Specialty Formulations, a contract pharmaceutical manufacturer that had 14 employees last year. As it works on an oral COVID-19 vaccine, USSF committed to a $5.2 million expansion to its 41,000-square-foot facility in Allentown. CEO Kyle Flanigan said during a panel discussion in LVEDC’s 2021 Annual Meeting video program that USSF is adding 100 people over the next couple years.
Next-door in Bethlehem, OraSure Technologies, which developed the nation’s first rapid HIV test, has begun a $7.5 million, 50,000-square-foot manufacturing expansion and plans to nearly double the number of employees as it commands national attention for developing a COVID test.
And outside of Easton in Forks Township, Follett, which made its name as a manufacturer of refrigerated dispensers, is earmarking part of its $12 million, 90,000-square-foot expansion to redesign medical-grade refrigerators and freezers for the storage of COVID-19 vaccines.
“Those business leaders have chosen this moment, during one of the most challenging economies in recent memory, to reinvest in Lehigh Valley because our community has the talent they need to innovate and the location where they can access resources quickly and affordably,” LVEDC President and CEO Don Cunningham said. “Their capital investment not only fulfills their current needs during the pandemic but signals their commitment to Lehigh Valley for the long haul. We’re working to ensure that life science executives outside the region are aware of this as they contemplate their post-pandemic future.”
The bioscience boom, propelled in recent years by the needs of the aging population, has accelerated across the country as operations ramped up to combat the deadly coronavirus. A recent report by leading commercial real estate firm CBRE indicates the sector is “recharged for an intensified expansion.”
Manufacturers of critical products, such as pharmaceuticals, medical devices, and personal protective equipment, are evaluating whether to “re-shore” foreign operations in the event of supply chain disruptions that the pandemic brought to light, and researchers are pioneering the next generation of medicine and technology amid record investments by venture capitalists and significant resources of the National Institutes of Health.
Commercial laboratory space grew by 12% in 2020 to 95 million square feet with another 11 million under construction across the country, according to CBRE’s report published in October.
Lehigh Valley sits amid what CBRE calls a “supercluster” of life science real estate within a 400-mile stretch from Boston to Washington, D.C. Lehigh Valley borders New Jersey, a pharmaceutical powerhouse teeming with biochemists, and is 60 miles north of Philadelphia, nicknamed “Cellicon Valley” for the concentration of cell and gene therapy research.
Lehigh Valley touts a strong network of 11 colleges and universities including Bethlehem’s Lehigh University, ranked among the top schools in the nation, and is within a short drive of other top research schools including Princeton University, University of Pennsylvania and Columbia University.
Large health care providers St. Luke’s University Hospital Network and Lehigh Valley Health Network are among the region’s biggest employers, and logistic leaders including Amazon and FedEx Ground have propelled Lehigh Valley to the nation’s top industrial markets because nearby interstates provide direct access to the Northeast markets and inland ports like Columbus and Nashville.
Those attributes have galvanized the life science micro-cluster in Lehigh Valley where labs process medical tests, distributers package pharmaceuticals and manufacturers produce medical devices. There were 176 life science establishments in 2019, 14 more than in 2009.
Medical laboratories were among the fastest growing segments of the cluster, growing employment by 3.4% annually over the last decade. Surgical and medical instrument manufacturers and companies involved in research and development in physical, engineering and life sciences each grew by about a percent annually over that same time period, according to data analyzed on Chmura Economics JobsEQ platform.
In the last five years, employment in Lehigh Valley’s life science companies grew by 16.6% to an all-time local high of nearly 6,300 by the third quarter last year, according to labor data analyzed on JobsEQ, and the average salary topped $94,000 in the third quarter last year, according to Chmura.
Many work for global life science leaders such as Olympus and B. Braun, both of which call Lehigh Valley home.
B. Braun CEO Jean-Claude Dubacher described Lehigh Valley as having a “great future.”
“When I look specifically [at the Lehigh Valley], it is impressive the talent we have, the capabilities we have, the capabilities we have built over the years…” Dubacher said last fall during an interview with Cunningham. “This is a big reason why we decided to stay here.”
B. Braun landed in Lehigh Valley in 1992 when it bought Burron Medical Products, a specialty plastics manufacturer that began in 1957. Its local footprint now includes headquarters in Bethlehem, a manufacturing operation in Hanover Township, Lehigh County, and a distribution facility in Upper Macungie. And it is expected to complete a 250,000-square-foot expansion of its manufacturing facility this year, which will enable B. Braun to add 250 new jobs.
Other medical equipment companies have followed. In 2015, Tyber Medical moved to Hanover Township, Northampton County, from New Jersey and has since doubled its work force. Within four years, it unveiled a $8 million expansion adjacent to its current facility at LVIP IV and a renovation of its existing one.
The surgical and medical instrument manufacturing sector is particularly strong in Lehigh Valley. The concentration of jobs locally in this sector is five times the national average, according to JobsEQ data.
Lehigh Valley’s life science companies not only have the manufacturing brawn but the brains working on the next life science innovation, said Cunningham, who moderated a panel discussion with three local life science executives as part of LVEDC’s 2021 Annual Meeting video program.
“We have a history of innovation here. Many people have likely heard this is the birthplace of Bethlehem Steel’s novel beam that gave rise to skyscrapers in the early 20th century,” Cunningham said. “But it’s also the place where the nation’s first rapid HIV test was made. We have scientists undertaking critical research on groundbreaking drug therapies, personalized medicine and gene silencing.”
Those innovations are often primed by Ben Franklin Technology Partners of Northeast Pennsylvania, which has incubator space at Lehigh University’s mountaintop campus in Bethlehem. Ben Franklin, a state-funded program, provides entrepreneurs the money, lab space and other support they need to turn their ideas into a business.
Many of its clients have such a health-related focus that Ben Franklin in March established a Life Science Network that, among other things, helps companies collaborate with colleges and establishes a professional network for interns and graduate students. Lehigh Valley companies landed $4.5 million of the $5.8 million that Ben Franklin invested in life sciences businesses in its 21-county region since 2011.
Among the Ben Franklin companies was founded by Dr. Sal Salamone, an industry veteran and New Jersey’s 2016 Inventor of the Year. He chose Lehigh Valley to start Saladax BioMedical, which develops devices to support personalized medicine, because of the strong support system afforded by Ben Franklin.
“They made it easy to set up a company, and it’s never easy to set up a company…” Salamone said during the panel discussion in LVEDC’s Annual Meeting video program. “Another good aspect of it is the tremendous talent pool in the area.”
Dr. Sam Niedbala, a “serial entrepreneur” who was among OraSure’s original founders, launched his CryoConcepts, which uses cold gasses to slice off “lumps and bumps,” in Lehigh Valley because of its ties to Ben Franklin and the talent at local schools.
Niedbala said the region’s life science industry has matured to point where the young scientists that he started out with are now experts teaching the next generation, growing and amplifying Lehigh Valley’s thriving niche in life sciences.
Don Cunningham: Lehigh Valley and “A Tale a Two Economies”
Below are a portion of the remarks delivered by Don Cunningham, President & CEO of the Lehigh Valley Economic Development Corporation, during the LVEDC 2021 virtual Annual[...]Continue to Next Page