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It may be top of the pile, but Massachusetts is facing stiff competition from other US states eager to attract foreign partners to their biotech clusters. Now it is piecing together new deals with European partners in an effort to stay on top.

Massachusetts is out to plant deals that could both create jobs and spark innovation in its biotech sector, and to underscore their ambitions, the state’s Governor joined the mayor of Boston and representatives of key trade bodies for a series of public and private meetings at the recent 15,000-strong Biotechnology Industry Organization (BIO) convention in Washington, DC.

One result was that IDBS Ltd, a UK-based software company specialising in the R&D and healthcare sectors, said it was to establish a US healthcare headquarters at its existing office in Burlington, MA, where it also is expanding its staff.

Also at BIO, Massachusetts announced R&D collaborations with Northern Ireland, Finland and Israel.

Chris Molloy, vice president of business development at IDBS, met Massachusetts Governor Deval Patrick, Massachusetts Life Sciences Center CEO Susan Windham-Bannister, along with representatives of the Massachusetts Biotechnology Council and Massachusetts International Trade Office. The meeting was one of more than 30 such “Global Connect” get-togethers held by the state at BIO. This followed on from trade mission to the UK and Israel earlier this year.

IDBS recently hired eight more people in Burlington, bringing its total there to 20, with the potential of adding more healthcare workers later this year. The company has existing business with local companies and hospitals including the Dana-Farber Cancer Institute, Novartis, and Astra Zeneca.

“The local intensity of advanced clinical research, life sciences R&D and industrial-academic collaboration provides an ideal environment to expand our R&D business and to create our US centre of excellence for healthcare,” IDBS founder and CEO Neil Kipling said. The company is using Massachusetts both as a stepping stone, and to expand its translational medicine business.

Innovation economy mission

To the politicians in Massachusetts, such agreements, while small initially, mean something more bankable. “A big part of this is jobs,” Governor Patrick said.

The Governor’s “innovation economy mission” to London and Cambridge in March, included Massachusetts business executives and state officials, with the joint objective of developing more links between the state and UK industries, including life sciences, technology, and clean energy.

As an example of the kind of business that Massachusetts is managing to attract, Sagentia Ltd, based in Cambridge, UK, opened its US headquarters in Cambridge, MA, last June. In the first half of 2011, Sagentia partnered with US clients on 15 new projects, most centered in Massachusetts and New England. According to the company, its US business is expected to add another 20 projects by the end of the year.

Following the move, the R&D services company has seen US growth over the past year jump to more than half of its UK parent’s global revenues. And in June Sagentia said it plans to add up to 25 jobs in the next 18 months in Cambridge, MA.

According to Phil Budden, British Consul General to New England, 40,000 Massachusetts residents work for a British company, while more than 250 Massachusetts companies are located in the UK. “The Governor’s trade mission, and the follow-up that has resulted, demonstrated just how strong our commercial links are,” Budden said.

Regenerative medicine collaborations

An early result of the mission to the UK was a collaboration signed mid-March between the University of Massachusetts Human Stem Cell Bank and Registry, and the UK’s Stem Cell Bank, to work on stem cell categorisation and distribution, and possibly the funding of joint research projects.

In another regenerative medicine initiative, Massachusetts Senate President Therese Murray announced a strategic R&D agreement at BIO in advanced tissue engineering R&D between the University of Massachusetts at Dartmouth and the University of Tampere in Finland, Tampere Institute of Biosciences and Medical Technology in Finland, the Technical Research Centre of Finland, the University of Ulster and Queen’s University of Belfast, in Northern Ireland.

That agreement resulted from a trade mission Murray led to Finland in April and an earlier meeting with Northern Ireland. There is no immediate money tied to the collaboration, but funding will come as projects emerge.

“The secret sauce in Massachusetts is the political support,” said Windham-Bannister of the Massachusetts Life Sciences Center, the quasi-public agency that oversees the $1 billion, 10-year Massachusetts Life Sciences Initiative created by the state’s legislature in June 2006.

R&D collaborations generate most results

In another development at BIO, Massachusetts and Israel said they will start a US$2 million collaboration on innovation and entrepreneurship in life sciences, clean energy, and technology. “Collaborations on R&D generate the most results,” said Avi Hasson, chief scientist at Israel’s Ministry of Industry, Trade and Labour. Israel has more than 40 agreements with countries, states and provinces worldwide. “We’re happy to see a top-down commitment from the government of Massachusetts, Hassonsaid. “We’re not here just about signing an agreement, but to show tangible benefits in the next few months.”

Governor Patrick and Israel’s Office of the Chief Scientist (OCS), the US-Israel Science and Technology Foundation, and three Massachusetts economic development agencies are all backing the collaboration, to be known as the Massachusetts-Israel Innovation Partnership (MIIP).  The agreement resulted from Governor Patrick’s trade mission to Israel in March.

The three Massachusetts agencies involved are the Massachusetts Life Sciences Center, the Massachusetts Technology Collaborative and the Massachusetts Clean Energy Center, which together are committing nearly $1 million in funding for Massachusetts companies engaged in cooperative industrial R&D projects with an identified Israeli partner company. Israel’s OCS is to provide up to $1 million for the corresponding Israeli partner companies.

Massachusetts is the first US state to enter into such an agreement with Israel, according to Governor Patrick. However, Israel is moving ahead with similar projects with other states, including Ohio, Virginia, Maryland and South Carolina, said Ann Liebschutz, executive director of the US-Israel Science & Technology Foundation in Washington, DC.

Three projects in each of the three areas of cooperation between Israel and Massachusetts are expected to be approved by the end of this year, according toDavid Miron-Wapner, executive director of the US-Israel Science & Technology Commission in Tel Aviv, Israel.

“Massachusetts does billions of dollars in trade with Israel today, and there’s much untapped potential,” Governor Patrick said. “We’ll use the $1 million investment on each side to leverage private investment.” He added that the deal will promote research collaborations, industrial partnerships, and commercialization of new technologies, as well as expand opportunities and job growth in Massachusetts and Israel.

There are nearly 100 companies with Israeli founders or Israeli-licensed technologies in Massachusetts. In 2009, these companies employed nearly 6,000 people and generated $2.4 billion in direct revenue for the state. Local firms exported over $180 million worth of goods to Israel in 2009.

Massachusetts also has hired a new trade representative to Israel, Hadas Bar-Or, who is responsible for increasing trade, investment and commercial partnerships between Massachusetts and Israel.