Biotech companies build close to colleges’ life science expertise

? Kendall Square in Cambridge is the biotechnology industry’s Garden of Eden, where scientists from nearby universities spun off little companies and began transforming scientific research during the 1970s and ’80s.

Today, 13 of the state’s top 25 biotech firms, accounting for more than $1 billion in research spending, have set up shop within a mile of the Massachusetts Institute of Technology and associates like the Whitehead Institute for Biomedical Research. Harvard University and its medical school are both just a few miles away.

U.S. Sen. Edward Kennedy, D-Mass., left, joins Daniel Vasella, chairman and CEO of Novartis AG , the pharmaceutical giant of Switzerland, in Cambridge, Mass. They announced this week that Novartis will build a 50 million research center at the Kendall Square/Massachusetts Institute of Technology area of Cambridge.

The latest trend is the growing presence of so-called big pharma, the research operations of large drug makers looking to tap the life science expertise that was once the exclusive purview of less risk-averse biotech companies.

Swiss pharmaceutical giant Novartis AG announced this week that it would lead its worldwide research out of a new $250 million center on MIT land in Cambridge. It initially will employ 400 scientists.

A similar facility is under construction by Merck & Co. across the street from Harvard Medical School. Amgen, Pfizer and Wyeth are among the other pharmaceutical companies that recently have built labs or developed research companies in the area.

Moving near academic centers isn’t exactly new. Major drug makers like Merck and Johnson & Johnson are concentrated in New Jersey, between New York and Princeton University. GlaxoSmithKline PLC does research in Research Triangle Park, N.C., near three major universities, including Duke, while the Scripps Research Institute, where Novartis already has a research institute, has made San Diego a hotbed in the field.

But some experts say the trend is accelerating as places like the Boston area build momentum as clusters and drug companies face increasing pressure to find new drugs.

The future profits of big pharma depend on the companies’ ability to tackle more complex diseases. That means turning to new areas of science like genomics that are being pioneered in academia.

“They need to be closer to where the action is, in order to keep double-digit growth in their pipelines,” said Dana Ono, a veteran biotech venture capitalist and consultant. “I would say you’re going to see more of that activity, and I think strategically it makes a lot of sense for the pharmas to be literally across the street from the cutting-edge technologies like genomics.”

Another factor: foreign companies like Novartis are finding the United States not only a more promising market but a better research environment, with stronger public and private support, and friendlier regulations. French drug-maker Aventis SA, for instance, moved its global research headquarters to New Jersey in 1999.

Dr. Lewis Kazis, who studies the economics of drug development at Boston University’s School of Public Health, says there are always worries about conflicts of interest.

But, if collaborations are “carefully orchestrated and it’s in the form of these unrestricted grants and support it can be done quite effectively.” He urged MIT to use outside monitors, should it make more formal arrangements with Novartis in the future.