Friday, June 20, 2008

Don't do it Josh!

The Globe this week had a number of articles on the passing of the $1B biotech bill in Massachusetts and the proxy fight for Biogen Idec. But a third item really raised my eyebrows.

Vertex's CEO Joshua Boger announced that Vertex is contemplating moving out of the state. The apparent driver of this is a concern that Vertex might outgrow the Boston area and that now might be the time to move, before the company grows even larger. Previous discussion of moving had produced a striking plan to relocate to the Boston waterfront.

Now, I'll confess a certain personal interest. I'm probably going to be in this area for most of my employment life, so I don't want to see employers leave (I can see Vertex headquarters from my office). Furthermore, I believe big companies like Vertex, BiogenIdec and such have a beneficial effect on their overall corporate neighborhood -- they tend to grow more talent than they need and those persons tend to start new ventures near the old ones.

Which is the point -- people don't really like to move. Yes, some folks will follow their job to the ends of the earth, but a lot of folks won't. So atop the disruption & distraction of moving, a lot of good people will leave in a short timespan. My general prejudice is that planners recognize such costs but then grossly underestimate them.

Why might Vertex be contemplating such a move? The most cynical explanation is to try to extract tax incentives from either Massachusetts or wherever they move to. Such incentives have driven previous moves or new sites, with mixed success. Rhode Island trumpeted extracting Alpha-Beta from Massachusetts, until Alpha-Beta failed in the clinic and disappeared into the dust.

More practically Boston does have its drawbacks & tradeoffs. Traffic is awful; but that's true of a lot of America. Housing prices are insane. Neither of these encourages new workers. On the other hand, the academic & hospital environment is huge and Boston has a decent transit system, which somewhat offsets the traffic issue. It is striking that so many large biotech & pharma have been trying to move in to Cambridge/Boston over the last decade or so (Merck, Novartis, Schering, Astra, Amgen, Sanofi-Aventis, etc).

But in any case, I return to my main argument. I'm sure Vertex could thrive in many places -- Boston is not Mecca, and if they moved they would recover and thrive again -- but after paying a steep price of disruption & lost talent.

Are there other options? One of course is to stick it out in Boston. Another is to have multiple locations, which incurs its own inefficiencies. No solution is perfect. But please leave migrations for the birds!

1 comment:

JSinger said...

Why might Vertex be contemplating such a move? The most cynical explanation is to try to extract tax incentives from either Massachusetts or wherever they move to.

That was my first thought: basically, Deval Patrick has created a clear incentive for companies to play this card as loudly as possible.