When I told you Research had left NJ, I wasn’t making it up

 

Hoffman-LaRoche Nutley, NJ- recently shuttered.

NPR ran a recent piece on the problem of ghost towns being left in the wake of the great pharma mergers and layoffs of the last 10 years.

The facility I worked at in Bridgewater, NJ closed in 2011.  I’m not sure they were able to find renters but the MBAs seemed to have a habit of overestimating what new tenants for labs space would be willing (or able) to pay.  The lab buildings I worked in were beautiful with lots of natural light but they were never full. The facility I worked at previously in Monmouth Junction, NJ was also abandoned for awhile but I had heard that there were some plans to lease it.  Or bulldoze it.  I can’t remember which.  I stand corrected.  Google maps says the site is “closed”.  That building was smaller and more contained.  It would have been perfect for a small biotech company on the rise.  It had a state of the art animal breeding facility and room for about 400 people. More than that makes it feel too cozy.

But as I wrote back in 2011, it is difficult to get funding for a startup.  The vulture capitalists like to see most of the work done before they commit their money.  Then there is the problem of finding money for equipment (this is cheaper due to the big pharmas auctioning off all their stuff), subscriptions to journals, buying expertise for robotic HTS assays, structural

The place where I spent the best years of my life

biology, specialized analytical chemistry and ADME analysis, and every other thing that a small biotech doesn’t have in its own arsenal.  A regular Joe researcher funding his own research will probably lose his house before the year is out.  So, he and his colleagues don’t have a whole lot of money to spend on lab space, which despite its abundance, is going to be expensive.

In the meantime, Big Pharma is counting on graduate students living on subsistence wages to pick up the slack on what are now reduced government grants.  It was hard enough to be a graduate student in Chemistry before the sequester.  Now, the money is much harder to come by.  For a person who may not get a decent paying job until he or she is almost 30, the prospects are bleak.

You can see Paul Krugman from here!

Funny how Paul Krugman doesn’t talk about this.  He’s living in the heart of what was Big Pharma territory and the desolation is hard to ignore.

Some of the lame excuses that Big Pharma gives for pulling out of NJ is that it’s too far from the City and the kids nowadays want to be right in the middle of some hot urban action, complete with expensive tiny apartments that they will have to share with roommates until they retire.  Also, Big Pharma has relocated to the coasts to be close to Harvard, MIT, Stanford and Scripps.  That’s so they can share ideas in the areas where genomics and molecular biology are king.  But this is utter bullshit.  For one thing, if you are working in Cambridge, MA or San Francisco, you are precluded from talking about your work with anyone.  There’s no sharing going on in the spirit of the Scientific Revolution of the 17th century.  It’s all proprietary and very hush, hush.  Your work won’t be published until the lawyers have taken out anything that’s remotely patentable.  It could be years before you can share your big breakthrough.

Plus, there is this new fangled device called the internet.  If I wanted to, I could use an online tool to order up a synthetic gene from California from the comfort of my backyard wisteria covered swing in Pittsburgh.  I can access thousands of journal articles, provided I had $33/electronic copy and could get over my impulse to strangle the ACS and Elsevier every time I had to do it.  I could attend meetings and conferences.  My work does not depend on my location.

And here’s one more reason why pulling out of NJ to go to Boston doesn’t make sense.  It’s fricking expensive.  If the MBAs were trying to save money, which is what they always claim is the reason for shuttering labs, why the hell would they relocate to some of the most expensive real estate in America??  Why not go back to the midwest where the mothballed labs are still cheap?  That’s where most of research was before the big mega mergers in the 90s brought everyone to the Northeast.  Cinncinnati, Kalamazoo, Ann Arbor all had thriving research communities before the business people decided to manage things.  Or even Pittsburgh.  This place is hopping lately, it’s urban, housing is cheap and there’s plenty of mass transit.

And this is where I think we come to the crux of the matter.  The relocation is about what the business people want.  They don’t want to be stuck in dowdy, suburban NJ with the high property taxes and they can’t think past the rust belt image of the midwest.  It’s not glamorous enough for the people who consider themselves the culture of smartness.  Smartness demands that it hang around other smart people.  Maybe if the business types rub shoulders with the supersmart MIT researchers, they won’t feel like they sold out their biology degrees to become finance wizards?  Projection of sorts?  I can only guess.

It’s also easier to jettison your workforce if you claim you HAVE to move to stay competitive.  Yep, just cut those hundreds of thousands of experienced STEM workers loose when they are in middle age and have family responsibilities.  Leave them stranded in NJ while their property values sink and they are stuck peddling themselves as consultants from one poverty stricken startup after another.

This is no way to treat the people who brought you Lipitor, Effexor and Allegra.  And, yet, this is the way it’s going.  Big Pharma sees its future as chronic illness specialists.  They will charge hundreds of thousands of dollars a year for a drug that some people can’t live without and will expect insurance companies to pay for them.  Think of it as sponge from some Nathan Brazil Well World novel. I know that a few of my friends are still making a living in companies that are focusing on orphan diseases and oncology but there’s something immoral about hooking up people to drugs you know they can’t live without with the goal of milking every dollar from them.  I realize that research is expensive but we didn’t use to be so mercenary about it.  Instead of solving the problem of out of control research costs, the new wizards of pharma finance have glommed onto cheap, dirty and unsustainable new ways to make money. Reduce your workforce to desperation, focus on the poor unfortunate chronically ill and ignore everyone else. This is the new business model.

And it is broken.

How MIT is going to kill scientific innovation in America

This is a quick one.

I found the blog Noahpinion as I was following a link from a silly article in The Atlantic from assistant finance professor Noah Smith at Stonybrook who thinks what the country really needs is 50 million more Asians.  Having worked with Asians I can tell you that they’re just like any other immigrant group.  Some of them are brilliant, some are average and some are highly overrated.  And just like other immigrant groups, many of them work incredibly hard when they come here.  But with so many of them laid off right now in my industry, I don’t think even they want 50 million more of them landing on our doorstep.

How would Noah Smith like it if there was another continent called Financia and, having an excess of well-trained finance specialists, they all wanted to move here and teach finance?  Not only that but because they stand out in a crowd with their blue hair, the hiring managers become fascinated with them and their well tested ability to express multivariate statistics without a calculator?  How many adjunct professors could Stonybrook absorb?  Think that over, Noah, and then, maybe you should get out more and see how the pharmaceutical industry and its hundred thousand of unemployed scientists are doing.  I think we can dispense with the notion that we’re all bad scientists because we didn’t get laid off piecemeal.  It was 19,000 at a clip.  Hardly discriminating, wouldn’t you say, Noah?  The last thing we need is more unemployed scientists who will work for peanuts.  I think there’s a finance paper in that somewhere.

Which brings me to the article that Noah discusses on his blog.  It’s about a paper written by Daron Acemoglu and James Robinson about how all you really need to be a successful entrepreneur is an excess of hard work!  Go Team America!  I won’t even go into all of the details right now because it would take too long and my blood pressure wouldn’t like it.

Noah gets how faulty the reasoning is in this paper:

Given these assumptions, the result of the model is not hard to predict – when you let losers lose and winners win, innovators try harder. Not exactly a shocker, given the assumptions.

So is this model counterintuitive? I argue: No. Instead, it is intuitive. It seems to have been built using intuition, and its results confirm commonly-held beliefs about the difference between “cutthroat” and “cuddly” capitalism. So I don’t think it makes much sense for Acemoglu and Robinson to defend their research from the bloggers by saying that the purpose of academic research is to be counterintuitive.

OK, time for my second point. Mark Thoma wondered why Acemoglu, Robinson, and Verdier get the result they get. Isn’t it true that entrepreneurs have to take a lot of risk? And doesn’t that mean that social insurance, which reduces risk, should encourage entrepreneurs to take more risk, not less? How is it that Acemoglu et al.’s model avoids this effect?

Here is the answer: it’s built into the math. The authors assume that the only cost of entrepreneurship is effort. From the paper:

We assume that workers can simultaneously work as entrepreneurs (so that there is no occupational choice). This implies that each individual receives wage income in addition to income from entrepreneurship[.]

In other words, the authors have assumed away much of the risk of entrepreneurship! A failed entrepreneur gets paid exactly the same wage income as a worker who doesn’t try to be an entrepreneur at all! This automatic wage income reduces the risk of entrepreneurship substantially, and makes social insurance much less necessary for reducing risk.

How realistic is that assumption? Well, in the real world, entrepreneurs in rich countries have limited liability, and can pay themselves wages out of their start-up capital. This means that many entrepreneurs can earn a wage even as they work to start businesses. But this wage is often much less than they could have earned otherwise, and if their business fails (a statistically likely event), they will be unemployed. So the “no occupational choice” assumption probably reduces the risk of entrepreneurship, relative to the real world.

Also, the authors assume that entrepreneurs do not put up any of their own wealth as startup capital for their ventures, and they assume no heterogeneity between worker/entrepreneurs. This means that it is just as easy – and no more risky – for a poor person to start a successful company as for a rich person to do so.

So to sum up my second point, Acemoglu, Robinson, and Verdier have assumed a model in which:

• Entrepreneurship is low-risk,
• Rich people have no advantage over poor people when it comes to starting companies, and
• Your probability of success depends entirely on how hard you work.

(No wonder liberals were not happy about this model, eh?)

So to combine my two points: When it comes to this kind of modeling, what you get out is pretty much what you put in. If you start off with the intuition that success is a function of how hard you work, and how hard you work is a function of how much the government will let you keep your hard-earned gains – in other words, if you start off with the intuition of pretty much every middle-aged conservative guy in America – then your model will probably spit out the result that countries face a tradeoff between redistribution and innovation…again, fitting perfectly with the intuition of pretty much every middle-aged conservative guy in America.

Pretty much.  Let me just add that the likelihood of this miraculous success coming out of the biotech world from all of the laid off scientists who don’t have the money for the start up costs to become entrepreneurs is vanishingly small.  You might be able to make this case of Silicon Valley type entrpreneurships.  In that case, coding and building new hardware are fairly predictable kinds of endeavors.  You *can* work extra hard and code yourself into exhaustion and the results of your coding depend solely on your energy level and cleverness.  You *can* design the next great iPhone device given Moore’s Law and the industrial engineers at Foxcomm who will rejigger the machines to your exacting specifications.  But this doesn’t work in biotech or pharmaceuticals because we don’t know what the f^(* we’re working with yet.

What the finance people don’t seem to get yet is that if they force the scientists into the entrepreneur environment without a safety net of any kind, they are going to get back LESS, not more innovation than they would have gotten than if they had provided us with steady salaries over a long period of time.  The problem is that it is hard to prove a negative.  There will be some innovation.  Some people will get lucky, independent of how much work they do.  Some people will have a breakthrough and it will seem miraculous.  The problem is that biology is so big and contains so many unanswered questions that the number of innovations that come out of just allowing people to work themselves to death without any visible means of support is going to be tiny compared to what the actual output could be.  And maybe that’s not important to the financiers who only want a handful of blockbuster drugs to make their billions off of.  But for patients with crippling diseases of all kinds, this period of just letting hard work be the main propulsion for innovation is going to be a tragic missed opportunity.

For some inexplicable reason probably having to do with the necessity of rationalizing why financiers and shareholders should take everything that isn’t nailed down to the detriment of everyone else’s livelihoods, the middle aged conservative is convinced that the rate limiting step when it comes to biotech is hard work.  If only those overpaid scientists would get off their fat asses and crank out more stuff or whatever it is they do in those labs, there would be more innovative discoveries to sell!  What’s really amazing is that they seem to have forgotten the billions of dollars large companies have spent on research on drugs that were never approved.  How is cutting back the research budget to zero supposed to work anyway?? One of these days, the middle aged conservative guy’s perspective is going to become discredited.  It will happen just about the time France and Germany become the world’s leaders in biotech.  While we starve the innovators, the cuddly governments will keep the fires going, allowing more innovation to happen without killing the innovators from exhaustion and bankruptcy.

Why wait?  Why not just have the government step in now and put our scientists to work?  Pay them decent salaries, put a floor beneath them so they don’t fall through it and fund research.  Sooner or later, it’s going to have to happen.  It is time for American finance people to come to terms with biological research as being a fixed cost, not a variable one and certainly not one that can do it all by itself.  Ain’t gunna happen.

Meanwhile, Derek Lowe at In the Pipeline reports on the latest casualty of the entrepreneurial biotechs:

It hasn’t been good over at Targacept. They had a big antidepressant failure a while back, and last month ended development of an ADHD drug, the nicotinic acetylcholine receptor ligand TC-5619.

They cut back staff back in the spring, and the CEO departed. Now the expected has happened: the company has apparently laid off everyone in research, and is conserving what cash it has to try to get something to the deal-making point. A sad, but familiar story in this business. . .sometimes companies come back after this point, and sometimes the event horizon turns out to have been passed.

More hard workers, probably a lot of Asians, scrambling for work on a daily basis is not a winning formula.

Tuesday: Are you still vulnerable to media messaging?

Check out this graphic from xkcd.  It shows the amount of absorbed radiation that is/was produced from various sources.   FYI: the blue squares are measured in micro Sieverts (the Greek letter μ), the green ones in milli Sieverts.  Micro is much smaller than milli, which in turn is much smaller than a Sievert.   But if you had been listening to the media for the past two weeks, you might have had induced panic attacks and rushed out to your local apothecary for a stash of potassium iodide (the chemists who still have jobs are not happy about the shortages).  I’ve read that people are even buying gas masks.

This makes me very sad.

Because as you might note from the graphic, the amount of radioactivity produced by the Fukushima plant for people in the evacuation zone is less than they might have gotten in a CT scan and only slightly more than any woman might have gotten in a mammogram machine.  If you’re truly worried about exposure from Fukushima, shouldn’t you also be worried about having your breasts flattened to the dimensions of a pancake and then blasted with xrays?

This is why I keep urging people to stop watching television news.  It doesn’t matter what channel you have on.  It doesn’t matter if it’s broadcast or cable.  They’ve got your number.  They know what kinds of stories will get your attention and they know what buttons to push to get the right Pavlovian response from you.  Be careful of what you read in newspapers too.  in this media and political environment, we must be constantly on our guard because it is so easy to manipulate public opinion.  We still have no idea who is behind all of the nuclear plant hysteria.  What was the purpose?  Was it an attempt to put the nail in the coffin of the nuclear industry in this country?  Kill it in its infancy?  Did it have help from energy speculators who are trying to drive up the cost of oil?  Is it the result of journalists who have a built in bias against nuclear energy after having watched The China Syndrome and the TMI accident coverage when they were younger?

By the way, did you notice how little radioactivity was produced during the TMI incident?  If you listen to the media, you’d think it was right up there with Chernobyl- squared.  The actual amount was tiny.  REALLY tiny.  It’s a blip.

Oh, sure, you say, but NO nuclear energy is safe.  You can never turn your back on it.  I’m not so sure I’d agree with that statement.  If anything, the Fukushima accident refutes these claims.  It shows that a 40 year old reactor can come through a “great” earthquake, a tsunami and a power failure and still expose people in Japan to less radioactivity than they would get in a CT scan.

That doesn’t mean I think we should run out and get one for the patio.  But I am very willing to consider nuclear energy as an alternative to burning fossil fuel.  The lessons learned at Fukushima could make new reactors even safer.

The emissions I worry about come from the broadcast end of the spectrum where carefully crafted messaging can turn otherwise perfectly rational people into raving lunatics indistinguishable from the end-of-time fundies with generators and MREs in their survivalist stash in the basement.  The hysteria that swept the nation last week was embarrassing.  It shows how vulnerable we are.  Manipulating the crowd is easier than we thought and, as we saw in the 2008 election season, it works just as well on the left as it does on the right.  Your liberal leanings offer you no protection.

The poison in the air isn’t coming from the reactor up the river.

In other news:

The female science and engineering staff at MIT is suffering from the same bias that women in industry face all of the time. (I actually think it’s gotten worse in the past 10 years).  A few years back, the female profs at MIT put together a study showing what they were up against when it comes to getting tenure.  They got less physical space, they didn’t get as many opportunities to consult, they weren’t added to leadership panels.  But here’s the thing that really got my attention because it’s something I see every damn day:

And stereotypes remain: women must navigate a narrow “acceptable personality range,” as one female professor said, that is “neither too aggressive nor too soft.” Said another woman: “I am not patient and understanding. I’m busy and ambitious.”

Despite an effort to educate colleagues about bias in letters of recommendation for tenure, those for men tend to focus on intellect while those for women dwell on temperament.

“To women in my generation, these residual issues can sound small because we see so much progress,” said Nancy H. Hopkins, a molecular biologist who instigated the first report. “But they’re not small; they still create an unequal playing field for women — not just at universities, and certainly not just at M.I.T. And they’re harder to change because they are a reflection of where women stand in society.”

This is very subtle but very real.  It just flies under the radar because no one is physically groping you.  I’ve seen more than one woman derailed by this crap.  You can’t be as assertive as a guy or you will be called “hard to work with” or “not a team player”.  But if you’re passive and demure, you’re ineffective and can’t get your work done.  Plenty of women have to be “coached” to walk a fine line.  It doesn’t seem to occur to management to straighten out the asses of the guys in the department who may be slowing down the pace of projects with their obstinate refusal to cooperate.

For women in the sciences, it’s like walking on eggshells all the time.  I’m glad that MIT is calling attention to the problem because I see very little effort to do so in industry.  It seems like industry thought it solved the problem when it dealt with sexual harrassment.  But my sense is that the power plays that exercised themselves as sexual dominance before have now gone underground.  The same hostility and gender discrimination still exists but has disguised itself as phone calls and emails not returned, not sharing crucial information or giving credit, refusing to meet or invite to meetings, and complaints about “temperament”. And the science world is just much more critical of women.  Everything they do is subject to more intense and punishing scrutiny.  It’s ruining our job prospects and careers. It looks like the women of MIT have gathered enough evidence to show that the discrimination is real and not a matter of sensitivity and perception.

Stieg Larson’s latest book, The Girl Who Kicked the Hornet’s Nest has a subplot that describes this phenomenon when a female magazine editor takes a job as the managing editor at an “old boys network” newspaper.  The symptoms are all the same as the ones described by the MIT profs, advice given to women on interviews and to our general experience in science and finance workplaces.  It’s not just a few isolated incidences.  It’s systemic.  Before you know it, MIT will be able to show a correlation.

Can a country afford to treat half of its brains like second class gray matter?